A m e r i c a n

M a n a g e m e n t

A s s o c i a t i o n

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION
A Global Study of Current Trends and Future Possibilities

2007-2017

Canada

USA - Latin America - Asia - Pacific

Europe - Middle East - Africa

A m e r i c a n

M a n a g e m e n t

A s s o c i a t i o n

HOW TO BUILD A HOW TO BUILD HIGH-PERFORMANCE A HIGH-PERFORMANCE ORGANIZATION
A Global Study of Current Trends and Future Possibilities

2007-2017

Copyright 2007, American Management Association
For more information about American Management Association, visit www.amanet.org

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table of Contents
PAGE

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi A Brief History of High-Performance Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 External Factors Influencing Organizational Performance . . . . . . . . . . . . . . . . . 7
Talents and Skills of the Workforce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Global Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Faster and More Disruptive Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Political and Regulatory Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 The Influence of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Environmental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Characteristics of High-Performance Organizations . . . . . . . . . . . . . . . . . . . . . 16
A Model of High-Performance Organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . 17 High Performance in Practice: What the Survey Data Tell Us . . . . . . . . . . . . . . 19 Strategic Approaches: Consistent, Clear and Well Thought Out . . . . . . . . . . 19 Customer Approaches: Going Above and Beyond . . . . . . . . . . . . . . . . . . . . . 20 Leadership Approaches: Focused on Performance, Beliefs and Talent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Processes and Structure: Centered Around Metrics, Customers, and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Values and Beliefs: Upbeat, Ethical, and Ready for Challenges . . . . . . . . . . . 24 The Context for High-Performance Organizations. . . . . . . . . . . . . . . . . . . . . . . 25 Summary of Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

High Performance in the Year 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Interview with Sara Ohmet, CEO of HIPOC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Proactive, Analytical, and Values-Driven . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Clear, Consistent, and Customer-Focused. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Well Led and Resilient. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Involved with the Community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 High Tech and High Touch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Transparent, Healthy, and Professionally Managed . . . . . . . . . . . . . . . . . . . . 33

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ii

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Epilogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
About this Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Demographic Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Table 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Table 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Table 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Table 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Performance Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 About These Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Table 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Table 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Value Proposition Questions and Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Table 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Table 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Product Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Table 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Table 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Management Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Table 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Table 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Process Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Table 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Table 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Employee Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Table 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Table 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

iii

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Strategy Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Table 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Table 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Customer Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Table 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Table 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Leadership Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Table 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Table 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Performance Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Table 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Table 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Culture Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Table 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Table 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Ethics Questions and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Table 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Table 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Authors and Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 About AMA and the Institute for Corporate Productivity . . . . . . . . . . . . . . . . . 71

iv

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Foreword
Today’s businesses face unprecedented challenges. Leaders are confronted with increased competition, globalization, demand for growing social responsibilities, technological changes, and new strategic thinking. These need to be managed to build and sustain a high-performance organization. To support your efforts, American Management Association commissioned the Institute for Corporate Productivity, previously the Human Resource Institute, to conduct a study to determine the impact of today’s challenges on organizations and the best practices associated with successful organizations. The High-Performance Organization Survey 2007 asked 1,369 respondents about a series of organizational characteristics that the literature suggests are associated with high performance. It also inquired about revenue growth, market share, profitability, and customer satisfaction. Our hope is that the answers from the study will give you guidelines to develop an action plan for your organization’s growth. Like all studies, there are limitations to the findings. As you will read in this report, we found several practices that are characteristic of high-performance organizations. We also identified external factors that influence corporate performance. Note that these can increase performance or slow it, in certain circumstances. The study identified five integrated components of a high-performance organization: strategy, customer focus, leadership, processes, and values. There were specific practices determined within each of the five components that were found to be critical. The external influencers included talents and the skills in the workforce, global competition, faster and more disruptive change within the industry, and technological developments. Through its various programs and services, including our webcasts and podcasts, AMA is committed to help you to adjust to the external influences identified in the study and reinvigorate your organization to the rapidly changing environment that surrounds you. Edward T. Reilly President and Chief Executive Officer American Management Association

v

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Introduction
High-performance companies are the role models of the organizational world. They represent real-world versions of a modern managerial ideal: the organization that is so excellent in so many areas that it consistently outperforms most of its competitors for extended periods of time. Managers want to know more about high-performance organizations so they can apply the lessons learned to their own companies. Of course, the goal is to ensure that their own organizations excel in the marketplace. The truth is, however, that it’s hard to discern exactly why some organizations perform better than others. First, there’s the problem of determining which organizations are high performers. Should analysts study only those that outperform others in their own industry? How long a time period should they conduct the assessment? And which measures, financial or otherwise, are the best ones to use? Once analysts settle on answers to those questions, they must try to determine the reasons that a given organization performs so well. After all, organizations tend to be complex and unique entities. This makes it difficult to draw straightforward lessons from them. Despite these difficulties, researchers have been trying to identify and study high-performance organizations for years. Much has been learned during this time. As Julia Kirby (2005) noted in the Harvard Business Review, management experts continue to build on one another’s work in order to formulate more sophisticated ideas about organizational performance. This study continues in that tradition, building on the theoretical work of others even as it provides new insights about high-performance organizations. Toward this end, a team of researchers analyzed the business literature in this area and conducted a global survey looking at the characteristics associated with high performance. The High-Performance Organization Survey 2007—commissioned by American Management Association (AMA) and conducted by the Institute for Corporate Productivity—asked 1,369 respondents about a series of organizational characteristics that the literature suggests are associated with high performance. It also inquired about revenue growth, market share, profitability, and customer satisfaction. The research

vi

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

team correlated responses about market performance with responses about strategy, leadership, customer-orientation, and other factors. Based on those findings, the team divided respondents into high, middle and low performers. Like all survey data, these results have their limitations. Correlation is not causation, and the data are based on self-reports rather than on external market information. Nonetheless, the results provide clues to what separates high-performance organizations from their low-performance counterparts. Generally speaking, high-performance organizations are superior to their low-performance counterparts in the following areas: • Their strategies are more consistent, are clearer, and are well thought out. They are more likely than other companies to say that their philosophies are consistent with their strategies. • They are more likely to go above and beyond for their customers. They strive to be world-class in providing customer value, think hard about customers’ future and long-term needs, and exceed customer expectations. And they are more likely to see customer information as the most important factor for developing new products and services. • They are more likely to adhere to high ethical standards throughout the organization. • Their leaders are relatively clear, fair, and talent-oriented. They are more likely to promote the best people for a job, make sure performance expectations are clear, and convince employees that their behaviors affect the success of the organization. • They are superior in terms of clarifying performance measures, training people to do their jobs, and enabling employees to work well together. They also make customer needs a high priority. • Their employees are more likely to think the organization is a good place to work. They also emphasize a readiness to meet new challenges and are committed to innovation. • Their employees use their skills, knowledge, and experience to create unique solutions for customers. The study also indicates that even high-performance organizations could improve in various areas. It found, for example, that high performers are much more likely than low performers to report that their organization-wide performance measures match their organizations’ strategies. This was, in fact, the single largest difference between the two groups. Even so, the data show that higher performers, taken as a whole, could do considerably more to match their performance metrics with their strategies. There’s likely a lesson to be learned here: like great athletes, even high-performance organizations must continuously strive to improve and “work on their games.” Without the passion for improvement, they are unlikely to remain high performers for long. After all, there’s no shortage of business leaders who are working hard to ensure that their own companies reach the top echelons of organizational excellence.

vii

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

A Brief History of High-Performance Theory
Although the concept and measurement of high-performance organizations are relatively new to management theory, they have roots that extend at least back to the beginning of the Industrial Revolution.

1

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

At the dawn of the Industrial Revolution, various employers strove hard to change workers’ attitudes from an agrarian or craft-tradition mindset to a factory mindset. Workers had to develop new habits such as punctuality, regular attendance, mechanical pacing of work effort, and standardization. Some observers of the day held a dim view of the prevalent work ethic. One author wrote, “If a person can get sufficient (income) in four days to support himself for seven days, he will keep holiday the other three, that is, he will live in riot and debauchery” (Powell 1972, quoted in Briggs 1969). This line of thinking was picked up by others, and theories emerged that bolstered the idea of controlling workers through policy, structure, and organization. Another line of reasoning was championed by Robert Owen, a successful cotton manufacturer in England during the early 1800s, who chided his colleagues for failing to understand the human element. According to Owen, managers spent time improving machines, specializing labor, and cutting costs, yet they made no investments in workers themselves. Owen said that money spent on improving labor would “return you not 5, 10, or 15% for your capital but often 50 and in many cases a 100%” (Butt 1971). These early viewpoints provide the roots for thinking about how to develop a high-performance organization. As industry grew, so did the theories about how to produce more or better products in the factories, and the dichotomy between focusing on people versus focusing on tasks and structures continued to evolve.

Scientific Management and Other Theories
Many of the next theories to surface focused on improving productivity. One of the best-known ideas—Scientific Management—came from Frederick Taylor in the U.S. during the late 1800s and early 1900s. Taylor said, “The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee.” He placed the responsibility for productivity on management rather than on workers, saying that “it is the manager’s job to design the jobs properly and to offer the proper incentives to overcome worker soldiering” [a term that Taylor used to mean “taking it easy”] (Taylor 1903). During the early 1900s, Frank and Lillian Gilbreth emerged on the management scene with a similar method for increasing productivity. Frank Gilbreth conducted motion studies in manufacturing; Lillian wrote one of the earliest contributions to the understanding of the human factor in industry, The Psychology of Management (1914), and she is known for bringing a human element into scientific management (Wren 2005). Meanwhile, during the early 1900s and on the other side of the Atlantic, Max Weber in Germany and Henri Fayol in France offered their perspectives on the growing interest in increasing productivity. The problem, as Weber saw it, was how a large organization might function more systematically. The answer, he concluded, was bureaucracy, which meant management by the office or position rather than by a particular person (Parsons, ed., 1947).

2

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

In contrast, Fayol touted the importance of managerial ability—as opposed to only job design and structure—to improve organizational performance. He felt managers needed particular attributes: • Physical qualities such as health and vigor; • Mental qualities such as the ability to understand, learn, and adapt; • Moral qualities such as energy, firmness, and a willingness to accept responsibility; • A general education that encompasses matters that do not belong exclusively to the function performed; • Special knowledge particular to the function, be it technical, commercial, financial, managerial, and so on; • Experience, including knowledge arising from the work itself and lessons from personal experience (Fayol, trans.; Storrs, 1949). Fayol also developed “principles of management,” which he felt should be taught in universities. They included items such as division of work, authority, discipline, unity of direction, subordination of individual interests to the general interest, remuneration, centralization, stability of tenure of personnel, and esprit de corps (Wren 2005).

Education and Training Focus on Performance
The ideas of these pioneers spread beyond factory management to general management, influencing not only the business world but academia as well. In 1881, the Wharton School of Finance and Economy at the University of Pennsylvania opened its doors as the first undergraduate school of business. It was followed in 1898 by the University of Chicago and the University of California at Berkeley. By 1900, the Amos Tuck School of Administration and Finance at Dartmouth College and (in 1908) Harvard followed, creating a business curriculum to teach managers how to manage organizations for greater productivity. Training also became available outside of the university system. American Management Association (2007), for example, traces its origins back to 1913 with the founding of the National Association of Corporation Schools, which later became the National Association of Corporation Training. Along with education and training came management research and a growing interest from academia in the challenges associated with trying to improve productivity. By 1933, Elton Mayo, who was on the faculty at the Wharton School of Finance and Commerce, found that workers’ performance could not be explained by any one factor. He emphasized the need for “effective collaboration” and a restoration of the “social solidarity” in a changing world that left people without stability, purpose or norms (Mayo 1933). He is credited with forming the Human Relations Movement that emphasized interpersonal relations, listening, communication, and sociohuman skills for the manager/leader. One of his ideas was that leaders should balance the needs of the worker with the economic needs of the organization.

3

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Management Theory Enters the Modern Age
The Human Relations Movement had its most important influence on management thought from about 1930 to 1950. During this time, there was inquiry into group dynamics, participation in decision-making, leadership, and motivational appeals to group members. In addition, there was a search for analytical tools and conceptual models to explain the interactions of the formal and informal aspects of organizations (Wren 2005). After World War II, rapid growth in the economy prompted management scholars to shift from a shop-level management orientation to general management theory. George Terry (1960), in his book Principles of Management, defines management as “the activity which plans, organizes, and controls the operations of the basic elements of men, materials, machines, methods, money, and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise.” Peter Drucker (1954), who is known as the greatest guru of management practice, introduced the idea of measuring success against market potential. He focused on the innovation of products and services and on improving how these were made or delivered. In addition, he studied other performance-related factors, including productivity, profitability, physical and financial resources, manager performance and development, worker performance and attitude, and public responsibility. Drucker also consulted with managers and encouraged them to ask the right questions, such as “What is our business?” and “What is value to the customer?” According to Drucker, “The important decisions are strategic decisions. Anyone who is a manager has to make strategic decisions, and the higher his level in the management hierarchy, the more of them he must make” (Drucker 1954). But not every expert focused on strategy or improved human relationships as the keys to improving performance. Paul Lawrence and Jay Lorsch (1969) took the position that organizational structure is critical to performance, and they developed a theory that showed managers how to analyze issues important to structure, such as the rate of change in business environment and the relative certainty of business-related information. Lawrence and Lorsch found that the more successful firms were those that adjusted to their relevant environments. As time went on, managers became perplexed by an overabundance of theories about how to boost organizational success. Andrew Van de Ven (1999) described the period of the ’70s as a “buzzing, blooming, confusing world of organization and management theories resulting in a tower of babbling and fragmented explanations of differing paradigms.” Yet, theorists tended to fall into two camps—those whose professional interests clustered around organizational behavior and those whose interests clustered around business policy and strategy (Pearce, 2003). Organizational behaviorists looked to leadership, motivation, and group behaviors within the organization. Policy and strategy theorists looked to work process and measurement. In a sense, the theories still tended to fall into the two classes that had emerged long before: those that focused on people versus those that focused on tasks and structures.

4

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

More high-performance studies are likely to emerge in the future, partly because the business environment continues to shift and partly because the science of analysis continues to improve.

There were advances in both areas. In 1974, for example, Ralph Stogdill wrote that “four decades of research on leadership have produced a bewildering mass of findings …the endless accumulation of empirical data has not produced an integrated understanding of leadership.” But by the 1990s, Bernie Bass had published new work showing that transactional and transformational leadership can be found across all parts of the globe and in all forms of organizations. Further, transformational leader behaviors were shown to relate positively to organizational performance. A wealth of data also emerged to show the impact of individual worker behavior on factors such as turnover, absenteeism, and unhealthy lifestyles. Likewise, wise management of employees became more widely accepted as a way of boosting productivity and decreasing operating expense (Cascio and Wynn 2004). W. Edwards Deming looked more at tasks and processes. After decades of boosting the success of corporations in Japan, Deming (1986) became a major management force in the U.S. He identified various organizational “diseases” that caused U.S. industry to go into decline, and he argued that 95% of all errors in organizations could be attributed to the systems under which people worked rather than to people themselves. The quality movement in the U.S., which emerged in the 1980s, is directly attributed to Deming. After the quality movement, organizations adopted other tools and technologies to assist them in developing and maintaining high performance. Six Sigma, computer technology, and “just-in-time” inventory management are examples that shaped planning and work processes in ways that substantially reduced cost or improved time-to-market, customer satisfaction, and the like.

Comparing and Measuring Performance
In 1982, when Tom Peters and Bob Waterman produced In Search of Excellence, the idea of comparing, identifying, and analyzing the best-performing organizations came into vogue (Kirby 2005). Since that time, many studies have used comparison techniques to try to tease out what sets high-performance organizations apart. For example, in Built to Last, Jim Collins (1994) took a somewhat similar approach. But the goal of identifying the most durable high performers through the art of comparison is a difficult one to achieve. One of the problems is that maintaining high performance is a major challenge for any organization. While U.S. business professionals bought In Search of Excellence and Built to Last in droves, many of the profiled companies were unable to sustain high performance. Foster and Kaplan, in their book Creative

5

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Destruction, make a strong case that surviving is not the same thing as performing. Over the last decade about half of the Built to Last companies have not been able to sustain a high-performance level—roughly the same percentage of In Search of Excellence companies that struggled in the decade following the publication of Peters’ and Waterman’s best-selling book. Even though the “right” method to determine high performance has not surfaced, the quest to find it continues. In 2007, for instance, James Neelankavil and Debra Comer published the results of a large study in which they analyzed the annual rankings of companies according to the four performance criteria used by Fortune to determine the best of the best (return on investment/equity, net profits, total assets, and revenues dimensions). There are also ongoing debates about how to measure corporate performance among corporations. For example, are total assets or return on investments truly the best measures of performance in an age when so much market value seems to stem from “intangibles”? These sorts of debates are increasing among economists, consultants, and business professionals. There are also debates about the most important metrics within companies. Kaplan and Norton (1992) are known for saying, “What you measure is what you get.” They are the creators of the “balanced scorecard,” a system in which measurements are meant to drive performance. Davenport and Harris, authors of Competing on Analytics (2007), suggest that organizations will increasingly use data as a competitive advantage. They argue that the frontier for using data is not just in measurement but also in identifying the most profitable customers, determining the right price, accelerating product innovation, optimizing supply chains, and identifying the true drivers of financial performance (2007). More high-performance studies are likely to emerge in the future, partly because the business environment continues to shift and partly because the science of analysis continues to improve. As Julia Kirby (2005) argued in the Harvard Business Review, today’s management experts are still building on one another’s work, developing more sophisticated survey instruments, mining richer data with better tools, and creating theories with greater explanatory powers about high performance. But if history provides a lesson, it is that no single factor or metric guarantees organizational success. Rather, high performance is a composite of many things. Practicing managers have much to learn from high-performance research, but they should beware of easy answers that promise long-term high performance.

6

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

External Factors Influencing Organizational Performance
This section highlights the primary factors that drive businesses to focus on and attain high performance.

7

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

The external factors that influence organizational performance range from the skill level of the labor force to the nature of today’s business environment. Of course, these elements are dynamic, not only influencing the need for organizational performance today but affecting how businesses will strive for peak performance in the future. Before we describe external factors of importance, it is important to mention that we do not discuss in this section theoretical models that attempt to describe and explain high performance in organizations, ground that was covered in the previous section. However, it should be noted that theories of high performance continue to emerge and evolve, influencing how organizational members view such performance and the strategies that can be adopted for attaining such performance.

Talents and Skills of the Workforce
If businesses are to become high-performance organizations, they must have employees who possess the right skills, abilities, and mindsets. When sufficient numbers of appropriately skilled workers cannot be found or trained, organizational performance is bound to suffer. In 2006, about 9 out of 10 U.S. manufacturers polled by the National Association of Manufacturers (NAM) said that they couldn’t find enough skilled workers to fill the jobs needed to run their shops. In fact, NAM reported that some 80% of its member manufacturers declared the shortage of skilled workers dire enough to adversely affect their production schedules (Williams 2007). Research from Sirota Survey Intelligence (2006) found that recruiting concerns go far beyond the manufacturing sector. Its poll of HR professionals in 2006 found 64% identifying recruiting as their leading challenge. Sixty-eight percent predicted the situation would continue at least through 2009. Also in 2006, Watson Wyatt reported that its poll of 1,100 employees and 262 organizations across the U.S. found 63% of employers admitting that they had problems finding workers with skills their firms needed. Keeping skilled employees onboard can be problematic, too. Thirty-nine percent of respondents to the Watson Wyatt (2006) poll identified retention of qualified workers as a major issue for their organizations. Talent shortages are not limited to U.S. employers. “In both developed and developing countries, the evolving workforce is creating a talent shortage,” declared an April–May 2007 article in Chief Executive. The publication pointed to aging and retiring Baby Boomers as one underlying cause of the dwindling talent pool, adding that rapid and extensive growth in developing nations has also contributed. It argues, based on information from the U.S. Department of Commerce, that three-fifths of the new jobs in this century will need skills that only about a fifth of today’s U.S. workers have. “Clearly,” it reports, “it’s time for talent to be viewed as a significant issue in boardrooms worldwide” (Appel 2007). Echoing the international concern about finding skilled talent, nearly 3 out of 10 employers worldwide said they would have hired more workers last year but were unable to find qualified applicants. A Manpower, Inc., survey included nearly 32,000 employers in 26 countries. In the Americas, problems were greatest in Peru, where 46% of employers reported a shortage of qualified workers. Canadian firms fared

8

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

best with challenges noted by only 26% of organizations. Forty-five percent of U.S. firms said their hiring would have been greater if skilled applicants had been available. In Asia, about a third of employers reported recruitment problems, though as many as 45% had trouble with staffing in Japan. Europe, the Middle East and Africa fared better, with South African employers reporting the greatest hiring difficulties (37% of employers) (Manpower, Inc., 2006). Workers’ influence on organizational performance is undeniably crucial. A Hewitt Associates study of 100 large U.S. companies in 2006 concluded that those with formal programs in place to identify and develop skilled workers and highperformance talent consistently achieved higher rates of shareholder return (Zielinski 2006). Further, 45% of 251 executives of global firms polled by Accenture the same year identified finding and keeping skilled workers as an important driver of their firms’ financial performance (Accenture 2006). Finally, an April 2007 talent management survey conducted by the Institute for Corporate Productivity found that among the most important drivers of talent management are the need to execute strategies, stay competitive in the marketplace, serve customers well, and drive innovation—all elements inherent in high performance.

Global Competition
The fact that the majority of organizations participating in the AMA/Institute for Corporate Productivity survey detailed in this report classified themselves as global or multinational in scope speaks to the influence of globalization in today’s business world. The global economy and, with it, global competition are growing at a fast clip. The Society for Human Resource Management declared in 2007 that “since 2001, the global economy grew at a rate faster than at any point in the last 45 years.” Newsweek International editor Fareed Zakara added that China and India, alone, have contributed significantly to the world’s trade, accounting for the addition of an estimated “2 billion to 3 billion new producers, consumers, and capitalists” (Smith 2007). That globalization exercises a direct effect on organizational performance was acknowledged by leaders of global firms in a 2006 Accenture poll. Sixty-one percent of the 251 executives surveyed worldwide called the ability to capture a greater share of the market a vital driver of their firms’ financial performance (Accenture, 2006). Similarly, authors Atul Vashistha and Eugene Kublanov observe that leading organizational globalization initiatives can position firms for success across multiple business units. The two suggest viewing international expansion as “growth and quality improvement opportunities” as well as a mechanism for transforming such factors as company structure, process design, communications, capabilities, and more (Vashistha and Kublanov 2006). Business expansion across international borders logically opens doors to new markets, but it also opens organizations to new competitors—a double-edged sword for some companies. Indeed, in 2006, The Ken Blanchard Companies’ 2006 Corporate Issues Survey found more than 6 out of 10 HR and training professionals at international organizations called competition their firms’ greatest challenge and the pressures attendant to it the year’s top issue (The Ken Blanchard Companies 2006).

9

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

…agility and resilience are likely to be characteristics of organizations that sustain (high) performance over long periods of time.

At the same time, many executives have recognized the opportunities inherent in increased global competition for customers. Maintaining a strong customer focus and responding to changing markets were cited as important drivers of financial performance by executives polled by Accenture (2006). The competitive landscape exerts an influence on corporate structure, in turn affecting organizations’ abilities to align their structures with their strategies. In 2006, balanced scorecard experts Robert S. Kaplan and David P. Norton looked at structural change and resource alignment to support strategic execution, making the point that the advent of global competition heralded a shift in corporate structure from centralization around products or locations to a more process-centered and flexible model. Some experts have labeled these flexible businesses as “Velcro” organizations, alluding to their ability to separate and rejoin organizational components into various configurations. Kaplan and Norton (2006) note that today’s organizations are challenged by the fact that intangible assets, such as knowledge workers and research and development, are playing an increasing role in corporate success, and by the fact that globalization has dispersed those assets worldwide. These factors are driving companies to get better at aligning both physical and intellectual resources, internally and externally, around the world.

Faster and More Disruptive Change
The pace of change is becoming both faster and more disruptive, according to results from the AMA/HRI Building Organizational Agility and Resiliency Survey 2006. The vast majority (82%) of 1,472 respondents reported that the pace of change experienced by their organizations had increased compared with five years previously, and a majority (69%) said that their organizations had experienced disruptive change—that is, severe surprises or unanticipated shocks—over the previous 12 months (AMA/HRI, 2006). An analysis of the survey results also found that companies that, according to self-reports, perform better in the marketplace are also more likely than their lowperformance counterparts to view themselves as agile and resilient, see “change as an opportunity,” and view themselves as having better change capacities at the individual, team, and organizational levels. Because such companies are more likely to say that they “induce change and force others to react,” the pace of change is unlikely to slow in the near future. There are simply too many high-performance organizations that see change as a competitive advantage. Therefore, agility and resilience are likely to be characteristics of organizations that sustain performance over long periods of time. The AMA/HRI Building Organizational Agility and Resiliency Survey 2006 defined resiliency as “the ability to absorb, react to,

10

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

and even reinvent who you are as a consequence of change” and agility as “the ability to move quickly, decisively, and effectively in anticipating, initiating, and taking advantage of change.” The research team on that report came to view agility and resiliency as two sides of the same coin of “adaptive capacity,” or the capacity of organizations to manage change. Companies with high adaptive capacities will drive other organizations to perform better in the future. Of course, being able to sustain over-average performance for years at a time is a rare characteristic. The University of Minnesota Spencer Professor of Strategic Management Alfred Marcus notes that just “3% of the 1,000 largest U.S. corporations consistently and significantly outperformed their industry’s average” between 1992 and 2002. Yet, such companies are likely to have a disproportionate impact in terms of their ability to make the business environment more disruptive and fast-paced. They tend to share certain characteristics, according to Marcus. These include “profitable growth, not growth at any cost,” innovation, flexibility, alliances with other organizations that enable growth and help mitigate risk, an understanding of customers and their needs, and a mastery of distribution channels (Marcus 2006). Other studies have found other sets of change-friendly attributes. A 2007 survey by Michigan-based Denison Consulting further quantified the benefits of a culture able to respond quickly to change. Said research analyst Ryan Smerek, “Companies that demonstrate higher levels of performance in key areas of organizational culture… tend to deliver better results in return-on-assets, sales growth, and shareholder value.” Smerek and his team analyzed data from 102 companies that responded to a Denison culture survey over an 8-year period and assessed culture in terms of a firm’s adaptability, consistency, mission, and involvement, examining such characteristics as customer focus, change initiatives, team orientation, and company values. “Companies with the best organizational culture scores earned an average return-on-assets of 6.3 percent, vs. 4.5 percent for firms with the lowest organizational scores,” Smerek reported. Top-scoring firms also achieved higher shareholder value: “market-to-book values of 440 percent as compared to 350 percent for firms with the lowest culture scores” (Denison Consulting 2007). As such companies thrive, their competitors are likely to try to imitate their attributes and characteristics. This dynamic will make for an increasingly competitive global business environment.

Technology
Technology and performance have been intertwined since the dawn of human civilization. In learning to create and exploit new technologies, humankind has been able to powerfully influence the world. Consider, for example, how the evolving understanding of heat and combustion led to technologies such as metallurgical techniques, wood stoves, steampowered engines, coal-powered plants, electricity, automobiles, large-scale machinery, and, eventually, most of what constitutes the modern workplace. Try to imagine the performance levels of workers without such technologies. How much could be accomplished by a single farmer without the advent of modern

11

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

farm equipment? How productive would construction workers be without trucks and power tools and bulldozers? How many widgets could be manufactured without machines? The late historian Alfred Chandler showed how various technologies—from the railroad to the cable—allowed companies to expand into enormous enterprises that required professional management in order to perform well. And economic historian Paul David has shown how new technologies can make organizations much more productive, but only after they’ve learned how to best utilize those technologies. That’s why it took decades for enterprises to reap the benefits of electricity and it has taken years for businesses to learn how best to harness computerization (Harford 2007). A March 2007 article on the New York Times Website mentions a 2007 report on the role of technology in the U.S. economy that found that “money spent on computing technology delivers gains in worker productivity that are three to five times those of other investments.” Issued by the Information Technology and Innovation Foundation, a research organization backed by IT companies, online auction site eBay, and the Communications Workers of America, the study suggests that the performance of certain industries—including health care, electric utilities, education and transportation—could be raised through the wise use of information technology. Not all economists are convinced that investments in technology have such a large payoff, however. “It could be that investments here pay off more than other investments, but the evidence is still not in, in my view,” noted economist Robert E. Litan of the Ewing Marion Kauffman Foundation (Lohr 2007). Other studies suggest that technology can be a double-edged sword, actually reducing performance when it’s misused. Sixty percent of contact-center professionals surveyed in 2005 said, for example, that technology problems were the main reason for low productivity in their organizations. Four out of five also said technology problems negatively impacted the customer’s experience. Surprisingly, 54% of the respondents said their callers were the ones who told them about the technology problems. Only 10% of the respondents reported having any methods in place for testing their own automated systems. In some industries, up to 80% of calls are handled by automated systems, so technology problems can have a major effect on efficiency and quality of service (“4 Out of 5,” 2005). Future technologies are likely to show the same patterns, raising performance levels when used well but hindering performance when used poorly. Radio frequency identification (RFID), for example, has the potential to save firms significant amounts of money along the supply chain. A 2006 report by the International Labour Organization (2006) goes so far as to predict that RFID will eliminate “routine warehousing tasks” and that the technology could save the retailer Wal-Mart $8.35 billion annually by 2020. Many other types of technology—from robotics to biotechnology to nanotechnology—promise to boost the performance of individuals and organizations in coming decades. But only time will tell how successfully organizations can leverage these technologies to their competitive advantage.

12

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

The keys to managing threats and opportunities are the ability to plan proactively, craft industry alliances, and stay informed about social and political trends. (Bonini, Mendonca, and Oppenheim 2006)
Political and Regulatory Changes
As most employers understand, laws and regulations can have a major impact on their businesses. In fact, respondents to the AMA/HRI Strategy Execution Survey 2006 saw government regulations as a major barrier to the execution of organizational strategy, second only to a scarcity of resources. Moreover, those respondents expected government regulations to remain one of the top barriers to execution 10 years into the future. Some other surveys corroborate the importance of regulations. Thirty-six percent of the global leaders who participated in a 2006 Accenture survey called their firms’ responses to regulations a top driver of financial performance. Similarly, in 2006, nearly two-thirds of 1,400 senior leaders in international businesses told PricewaterhouseCoopers that changing regulatory environments was the biggest obstacle they faced in guiding their organizations to success (Scalfane 2006). But it isn’t just regulations that affect organizational performance. In a global marketplace, the political makeup of nations can often determine success or failure in a given region. In fact, political instability topped the list of risks threatening global organizations on Aon Corporation’s 2006 Political & Economic Risk Map, a ranking of countries based on factors including politics, civil unrest, terrorism, regulatory issues, and other matters. The firm ranked legal and regulatory issues immediately behind political concerns (Aon Corporation 2006). Sociopolitical issues across the world have become increasingly important to businesses for two reasons. First, of course, is globalization itself. Second, some argue that political issues are more dynamic today than they were several decades ago, and the global media bring them to the world’s attention more quickly. Moreover, the relations between and among nations have become more complex in recent years. “The challenge,” according to McKinsey & Co. executives, “is to find a way for companies to incorporate an awareness of sociopolitical issues more systematically into their core strategic decision-making processes,” recognizing that such issues can present not only risks but opportunities as well. The keys to managing threats and opportunities are the ability to plan proactively, craft industry alliances, and stay informed about social and political trends (Bonini, Mendonca, and Oppenheim 2006).

The Influence of Ethics
Do organizations that make a commitment to ethical operations perform better? In 2006, Baylor University professors and two of five coauthors of “Ethical Attitudes in Small Business and Large Corporations”—a survey sent to 10,000 U.S. business

13

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

If organizations are going to get the discretionary behaviors from individuals which are so important to business performance, they must work to create supportive cultures which encourage innovation and performance.” (“The Stat,” 2005, p. 15)

professionals in 1985, 1993, and 2001—concluded that an ethical atmosphere in an organization was good for efficiency and the bottom line. Their reasoning was that ethical attitudes tend to translate into ethical behavior, in turn enabling those who deal with the organization to develop trust in the system. A lack of trust in an organization’s fair dealing means all transactions must be monitored more closely, which takes time and drives up costs (Shaw 2006). According to a 2005 white paper by ISR, research from DePaul University showed that companies with a strong, public commitment to ethics had a higher market value than organizations that had no ethics policy and also than organizations that adopted an ethics code and did nothing else. Those with a public commitment to ethics had an added market value of $10.6 billion. Companies that had adopted an ethics code and did nothing else had an added market value of $8.1 billion. Those organizations that had no code had the lowest added market value—$3.24 billion (“Making,” 2006). Research by the Chartered Institute of Personnel and Development (CIPD) in 2005 also spoke to an ethics/performance connection, concluding that companies with well-developed corporate value systems tend to perform better if those values are inculcated into the sense of purpose employees bring to their work. “To deliver effective performance, organizations need to work hard to create a shared vision and values among their people,” said Angela Baron of CIPD. “Mission statements and strategic decrees from on high are not enough. People need to feel a sense of purpose which is reflected in a positive environment. If organizations are going to get the discretionary behaviors from individuals which are so important to business performance, they must work to create supportive cultures which encourage innovation and performance” (“The Stat,” 2005, p. 15). A reputation as an ethical company can also serve as a magnet for top talent. Stanford University surveyed 800 MBA students from 11 North American and European business schools in 2005, asking each to rank attributes they deemed important factors in making employment choices. The students’ third-place choice—cited by 77% of respondents—was a potential employer’s reputation for ethics and caring, leading researchers to conclude that companies seen as highly ethical and with a reputation for social responsibility may have an edge in recruiting the top talent needed to drive organizational performance (Weber 2005). Various scholars have focused on what some business professionals see as a tradeoff between a focus on the bottom line and a focus on ethics and social responsibility.

14

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

In a 2005 article, Ivey Business School Professor of Strategy Pratima Bansal argues that “there does not have to be a tradeoff between economics and ethics.” Bansal notes, “There is a compelling business case for firms to operate in the overlapping space where activities are both financially profitable and socially and environmentally responsible. In this middle ground, firms reduce costs, mitigate risks, protect their reputations, stimulate innovation, and find new, sustainable sources of economic well-being” (Bansal 2005). In short, ethical and socially responsible actions can, when undertaken wisely, help an organization optimize its performance.

Environmental Changes
The idea that the natural environment is a factor in organizational performance is a new and still controversial one. The so-called sustainability paradigm assumes that a company should be not only financially sustainable but socially and environmentally sustainable as well. Some are calling this the “triple bottom line.” The underlying idea is that in a highly integrated, global business system, the long-term performance of organizations will be based on the long-term health of societies and the natural environments on which they rely. Others see the issue in simpler and starker terms. “Environmental matters have financial, operational, and reputational impacts,” declared a February 2007 article in London’s International Financial Law Review. The publication advises that “irrespective of whether one accepts the socio-moral argument that companies have an ethical obligation towards the environment, a proactive approach to environmental risk management is essential because failure to comply with environmental regulation (or to adequately respond to environmental risks) can have big financial implications” (“It’s Not Easy,” 2007). A specific exploration into the relationship between compliance with environmental management standard ISO 14001 and business performance was the focus of a 40-organization study in 2006. Participating firms reported their procedures for compliance with the standard, leading researchers to conclude that “standardization of the organization’s handling of environmental issues [leads] to better organizational environmental performance…and a positive impact on employee discretion.” However, the study did not find any evidence supporting better business performance resulting from compliance with the ISO standard (Link and Naveh 2006). Rumblings about environmental changes and organizational responsibilities aside, some quantification of such concerns as they impact business leaders was provided by a 2007 survey conducted by the Institute for Corporate Productivity. The research concluded that “environmental issues are not yet seen as issues that drive or will drive key business decisions to any major extent.” This isn’t to say, however, that many environmental issues will not become much more important over time. Indeed, due to compliance requirements as well as social pressures, organizations’ performance might well come to rely, at least in part, on their ability to effectively implement “green practices.”

15

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Characteristics of High-Performance Organizations
This section presents the characteristics of high-performance organizations. First, we present a model of high-performance organizations. Second, we look at data from the AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007 to see how well it supports the model and to detail approaches that are correlated with high performance.

16

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Of course, every organization is unique, and this applies to methods of managing and sustaining high performance. Each of the high-performance companies in our study uses its own particular blend of approaches, and this is as it should be. Executives in any organization can and should select the approaches most suitable to their particular organization based on their market situation, their strategy, and their people. But the composite survey results revealed in this section provide a broad perspective of the many ways that organizations manage their performance. Just as we can characterize the composite training methods of high-performance professional athletes, we can report the results of how the best organizations operate and succeed. And, like professional athletes’ training regimes, the regimens of high-performance organizations show us the many ways to gain success. As aspiring athletes can pick and choose from the composite regimen of professional athletes to best fit their sport, body type, and physical abilities, so can executives and managers choose from our composite results for high-performance organizations.

A Model of High-Performance Organizations
We have seen in the literature review section of this paper that there is considerable history and theory behind the notion of high-performance organizations. From this theory and from close analysis of successful business practice, experts have derived various principles of high performance. From Weber, for example, come insights about the importance of organizational structure and processes. Drucker and Van de Ven point out the need to align behavior and strategy. Deming highlights the virtues of measuring people, processes and outcomes. From such literature, we have developed a model of performance that centers on five major characteristics of organizations. The first of these areas is strategic approach. We posit that an organization’s consistency of strategic approach helps determine its success. This consistency can be measured to see how well the organization “walks the talk.” High-performance organizations tend to establish clear visions that are supported by flexible and achievable strategic plans. They also have clearly articulated philosophies that set the standards for everyone’s behavior. In addition, they have leaders, managers, and employees who behave consistently with the strategic plan and the company’s philosophy. The second major characteristic is tied to customer approach—that is, how a company treats its customers. High-performance organizations tend to have clear approaches to obtaining new customers, treating current customers, and retaining customers. They also build the necessary infrastructure and processes to support their customer approach. Third is the leadership approach. This describes the organization’s strategy in managing people to achieve a particular set of behaviors. High-performance organizations tend to be clear about what behaviors employees must exhibit to execute the organization’s and departmental strategies. Executives and managers set clear goals, understand employees’ abilities, and guide their performance. Fourth are processes and structure. This captures how organizations arrange their work processes, policies, and procedures to support and execute strategy.

17

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

High-performance organizations have processes that reinforce strategy, setting up work flows and tasks that most effectively enable employees to meet internal and external customer needs within the limits of the strategy. Such companies tend to use a wide variety of metrics to gauge the work for each department and the organization as a whole. Fifth are values and beliefs. These are essential to helping a company execute its strategy and achieve its mission. High-performance organizations typically have a set of well-established values that are the deep drivers of employee behavior and are well understood by the vast majority of the employees. The values and beliefs are embedded in the organization and are consistent with the company’s approach to leadership. An extensive review of the research indicates that these five factors are the major drivers that influence organizational performance. Each interacts with and influences the others, creating a whole system. A change to one creates changes in the others. Subsequently, the system tends to be in continual flux. The interactions among these five characteristics are illustrated in the model below.
INTERACTIVE COMPONENTS OF HIGH-PERFORMANCE ORGANIZATIONS

Strategic Approach

Customer Approach

Leadership Approach

Processes & Structure

Values & Beliefs

From Overholt, Granell, Vicere, Jargon 2006

One way to think about how a system is continually shifting is to picture a sailing vessel. A sailboat is a system made up of various crucial components, among them the helm (or steering wheel), the rudder, which is controlled by the helm, the boom, which is attached to the sail, the sail itself, and the sheets (or lines) that control the boom. These components must work together as a system or the vessel as a whole will fail. The wind is analogous to changes in the market and these components are like the five major drivers of organizational performance. If the rudder and the helm become disconnected, there will be no steerage. If the sheets become disconnected from the boom or the sail becomes disengaged from the boom, then the vessel can no longer use the air currents around it. Instead, it becomes a foundering victim to the forces of sea and wind.

18

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

As any sailor knows, moving as planned through the sea means always accounting for the direction and the velocity of the wind, the length of the sheets, the cut of the sail, the currents in the water, and the angle of the rudder. As the sailor goes forward, he or she is simultaneously adjusting these components to harness the wind and accommodate the sea, continually rebalancing the components to maintain an essential harmony among them. This is the underlying problem and challenge in high-performance organizations. The executives must know how to move their organizations forward while balancing the parts of the system. Executives in high-performance organizations follow the direction of the wind and water (market changes), using them to their advantage as they guide their organizations onward.

High Performance in Practice: What the Survey Data Tell Us
To test this high-performance model and identify how high-performance companies achieve success, the AMA/Institute for Corporate Productivity team conducted a global survey to which 1,369 companies responded. The AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007 analysis then grouped respondents into three categories, based on their responses to market performance questions that focused on revenue growth, market share, profitability, and customer satisfaction. Based on those self-reports, respondents were placed into three categories: lowest performers, mid-level performers, and highest performers. The team then compared the highest performers to the lowest performers on key attributes within the five areas detailed above: strategic approach, customer approach, leadership approach, processes and structures, and values and beliefs. The results reveal which attributes are stronger in high-performance organizations than in less-well-performing organizations. Overall, of the 79 total attributes, 64 were found to be positively correlated with high performance. Thus, the results paint a compelling picture of how high-performance organizations achieve their success.

Strategic Approaches: Consistent, Clear and Well Thought Out In the area of strategic approach, consistency is important to high performance, the survey data indicate. The common wisdom of “walk the talk” is an indispensable ingredient in high-performance organizations. Most people judge the truth of what an individual says by matching it to his or her behavior. If an executive, for example, says one must behave consistently with the company’s strategy or philosophy and then behaves inconsistently, employees draw a variety of conclusions, most of them destructive to an organization: • Do not believe what he or she says. • We are allowed to behave the way the executive does (or we can pick and choose which rules to follow). • The rules do not apply to everyone (or anyone) and therefore we are allowed to do whatever we wish. 19

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Executives in high-performance organizations avoid these problems by ensuring that employees are clear about the strategic plan and the company’s approach to business and by ensurMost Widely Used Practices ing that managers behave consistently. On all • Organization’s philosophy statement is 12 survey attributes that measure consistency consistent with its strategy. of strategic approach, the high-performance • Respondents know what they need to know about their organization’s strategy organizations scored higher than the lower in order to do their jobs effectively. performers. The survey assessed employees’ • The basic theme of the organization’s understanding of the company strategy and philosophy statement matches philosophy as well as the degree to which respondents’ personal philosophy. behavior is consistent with strategy and philosPractices Where High Performers ophy. All 12 attributes are positively correlated Furthest Outstrip Low Performers to high performance. • Organization-wide performance measures Consistency of leadership is only match the organization’s strategy. a part of the equation. The AMA/Institute for • Organization’s strategic plan is clear and Corporate Productivity High-Performance well thought out. Organization Survey 2007 shows that the single • Employees act in ways that are consistent with the behaviors needed to execute the most widely cited strategic practice among strategic plan. high-performance organizations was, “My organization’s philosophy statement is consistent with its strategy.” And the strategic practice in which high performers outstrip low performers the most is “Organization-wide performance measures match the organization’s strategy,” followed by “Organization’s strategic plan is clear and well thought out” (see Appendix, Table 23). These findings indicate that high performance is not related just to consistency of leadership behaviors but to its consistency with the overall philosophy of the organization. Leaders come and go, but philosophy tends to be more stable. Strategies should be aligned with these philosophies as well as with performance measures. Consistency is not enough, however. The great American poet Ralph Waldo Emerson once wrote, “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.” High-performance organizations must make sure that their consistency isn’t “foolish,” which is why ensuring that a strategic plan is “well thought out” is so strongly associated with market success. No company can perform well if poor leaders devise poorly conceived strategies, even when those strategies are consistently implemented.
HOW DO HIGH-PERFORMANCE ORGANIZATIONS APPROACH STRATEGY?

Customer Approaches: Going Above and Beyond Customers are crucial to nearly any line of business, but what kind of customer approaches are most effective to establishing high performance? To find out, the AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007 included 12 questions about how respondents view customers, treat customers, and are organized to meet the needs of their customers. The data reveal that all 12 of the customer-related questions are positively correlated with high performance. 20

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Specifically, the results indicate that highperformance organizations tend to be more attuned to the current and future needs of their customers than low-performance organizations. High performance is Most Widely Used Practices also associated with a very strong emphasis on customer • Organization believes that the business service, including vigorous efforts to serve customers exists primarily to serve customers. better than anyone else in the industry. The survey also • Organization strives to be the best in the world in providing value for its best found high performance is linked with the use of “cuscustomers. tomer information as the most important factor related • Organization assesses and determines its to developing new products and services” (see Appendix, customers’ future needs. Table 25). In short, high-performance companies have— Practices Where High Performers and act on—foresight in regard to their customers. Furthest Outstrip Low Performers High-performance firms also understand that differ• Organization uses customer information ent customers have different needs and that some cusas the most important factor for tomers add more to the bottom line than others. Such developing new products and services. organizations create different types of processes to manage • Organization accurately targets its different categories of customers and they are attuned to customers’ long-term needs. shifts in the market that require them to change how they • Organization exceeds customers’ expectations. treat customers. In general, they are more outwardly focused on customer needs and behavior than low-performance organizations. The survey questions and responses in this area can also be grouped into three major categories: 1. External focus: In general, high-performance organizations are more willing than other organizations to hear what is best for the customer rather than what is best for the organization. 2. Philosophical approach: High-performance organizations intend to be the “best in the world” in providing value and exceeding customer expectations. These are not just lofty words or statements, some research shows, but rather actions that are put into practice. As with strategic approaches, high-performance companies are more likely than other organizations to “walk their talk” in terms of customer focus. 3. Internal design: High-performance organizations also tend to be better at creating and maintaining internal processes that best meet the needs of the customer. Their customer-focused processes are also more flexible than those in low-performance organizations and leave room for employees to use their judgment in meeting customer needs.
HOW DO HIGH-PERFORMANCE ORGANIZATIONS APPROACH CUSTOMERS?

Leadership Approaches: Focused on Performance, Beliefs, and Talent Leadership—especially at the CEO level—is frequently portrayed as the key ingredient in creating a successful organization, but the larger research suggests this can be overstated. Research conducted by Nitin Nohria and colleagues at Harvard Business School found, for example, that on average, 14% of a firm’s performance is dependent on its leader (“Creating,” 2003). Leadership is only one of five key components of organizational systems that 21

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

must operate in a kind of mutual harmony to be effective. However, in today’s superstarfocused culture, executives and leaders are what most business writers tend to focus on first. People are acculturated to emulate the superstar, to be just like him or her. The AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007 asked participants 11 questions about their organizational approach to leading. The research team found that one of the most widely agreed-on leadershiprelated strategies is ensuring that “everyone is clear about the organization’s performance expectations.” About two-fifths of respondents either strongly or very strongly agreed that their organizations do this (see Appendix, Table 26), and high-performance organizations were considerably more likely than low-performance organizaHOW DO HIGH-PERFORMANCE tions to say this. In fact, of the 11 leaderORGANIZATIONS APPROACH LEADERSHIP? related strategies asked about in the survey, this was the one in which higher performers Most Widely Used Practices furthest outstripped lower performers. • Immediate supervisor understands the strengths respondents bring to their jobs. Another important factor associated • Employees believe that their behavior with high performance is “making sure affects the organization. employees believe that their behavior affects • Everyone is clear about the organization’s the organization.” Leaders can’t do their jobs performance expectations. alone. They must be able to convince others Practices Where High Performers of just how important their own behaviors Furthest Outstrip Low Performers are to the success of the whole organization. • Everyone is clear about the organization’s A third factor that was strongly performance expectations. associated with performance was the idea • Management promotes the person who that “management promotes the person who has the best skills and knowledge to do has the best skills and knowledge to do the the job. job.” It appears that performance tends to be • Employees believe that their behavior affects the organization. higher in organizations where promotions are based on talent and merit rather than on other factors, such as organizational politics. The leadership-behavior survey questions can also be analyzed from a broader perspective that is based on the high-performance paradigm set out above. The questions can be grouped into three major categories: 1. Supervisory relationship: For over 50 years, organizational researchers have found that the most important relationship within any organization is the one between the employee and his immediate supervisor. A good relationship between employee and supervisor is associated with high-performance, more safety-conscious behavior, better physical health, and higher employee satisfaction. Not surprisingly, the best-performing organizations in the survey scored higher than lower in all the questions related to this area, including employee comfort with being able to express disagreement. 2. Innovation in HR: The survey also found that high-performance organizations had more innovative HR than the low-performance organizations. Their HR functions bring new approaches to people management so they are continually aware

22

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

of what other companies are doing to more effectively manage people. 3. Clarity of goals and consistency of rewards: As noted above, high-performance companies are clear and consistent in the area of performance expectations, and they also tend to be more consistent in the ways they reward workers. They set clear performance expectations, reward employees who have the best ability, and reward those employees who strive to best meet customer needs. In short, clarity and consistency are important in terms of strategy and philosophy, customer focus, and leadership behaviors. These components mutually reinforce each other, strengthening what we can term the “culture of performance” by minimizing the destructive and nonproductive behaviors that are the result of mixed messages.

Processes and Structure: Centered Around Metrics, Customers, and Training Sometimes truisms are true, and this seems to be the case with the old adage, “You can’t manage what you can’t measure.” The AMA/Institute for Corporate Productivity HighPerformance Organization Survey 2007 strongly indicates that clearly defined performance measures are a major key to success. Not only was the statement “my organization’s performance measures are clearly defined” one of the most highly agreed to statements among high-performance organizations, but it was the statement in this survey section in which high-performance organizations outstripped lowperformance organizations the most. HOW DO HIGH-PERFORMANCE The survey found that other especially critical charORGANIZATIONS APPROACH PROCESSES AND STRUCTURE? acteristics associated with high performance are the following: Most Widely Used Practices 1. A strong focus on customers • Organization’s highest priorities are on meeting customers’ needs. 2. The kind of training and instruction • Organization’s delivery schedules for that is necessary to do jobs well, and products and services are based on 3. Keeping current with state-of-thecustomer needs. market technological advances. • Organization’s performance measures The first of these reinforces previous findings—that are clearly defined. is, there’s a strong relationship between high performance Practices Where High Performers and customer focus. The second suggests that training and Furthest Outstrip Low Performers skills play a strong part in high performance. And the • Organization’s performance measures third of these points to the need to stay current with techare clearly defined. nological advances, which clearly drive performance when • Employees receive the training and used wisely. instruction necessary to do the job properly. The survey asked 24 questions in this section, twice • Organization keeps current with state-ofthe number in the first three sections. The high-perforthe-market technological advances. mance organizations were rated higher on most of those variables. The processes and structure questions and responses can be grouped into four major categories to provide a broader perspective. 1. Information access: High-performance organizations understand the power of good communication and of sharing information. Information is viewed as something to be shared rather than something to be hoarded for the purpose of power and control. 23

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

High-performance organizations’ supervisors share information freely. In addition, information pertinent to the job at hand is made readily available to employees. 2. Technology: Keeping abreast with technological advances is an ongoing strategic concern. High-performance organizations are more likely to use state-of-themarket technology than other organizations. And since such organizations are more customer-focused than others, they also are more likely to use customer-relationship management software than low-performance companies. 3. Performance measures: As noted above, high-performance organizations leverage performance measures to drive clarity and focus throughout their organizations. 4. Customer focus: High-performance organizations are more aware of internal and external customer satisfaction than low-performance organizations. In addition, high-performance organizations have processes than are more outwardly focused than low-performance organizations.

Values and Beliefs: Upbeat, Ethical, and Ready for Challenges Being seen as a “good place to work” is a solid indicator that an organization is a high performer. Not only is the characteristic most widely cited by high-performance organizations, it is also one of the areas in which those organizations furthest outstrip low performers. High-performance organizations are also well aware of external factors such as customers, markets and competitors, and they are ready to take on new challenges. Another factor that’s relatively strongly correlated with performance is a commitment to innovation (see Appendix, Table 31). The survey also asked respondents about ethics. The research team found that HOW DO HIGH-PERFORMANCE fully 69% of responding organizations said ORGANIZATIONS that their organizations adhered to the APPROACH VALUES AND BELIEFS? highest ethical standards, and the percentMost Widely Used Practices age was higher for top performers. The high • Most employees think the organization is positive response rate reflects the current a good place to work. concern over ethical behavior in organiza• The organization’s organizational culture is externally focused on customers, markets, tions, and the data indicate a positive relaand competitors. tionship between performance and ethics. • The organization emphasizes readiness to The values, beliefs, and ethics survey meet new challenges. questions can be grouped into four categories Practices Where High Performers to provide a broader perspective. Furthest Outstrip Low Performers 1. Approach to work: In addition to • The organization emphasizes a readiness some of the values noted above, employees in to meet new challenges. high performance companies tend to be loyal • A shared value that keeps the to the company and they tend to participate in organization together is commitment to innovation. their organization’s social events. They also • Most employees think the organization is tend to be more involved and more comforta good place to work. able with their companies. 2. How the organization treats its 24

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

employees: High-performance organizations create an environment that fosters cohesiveness, loyalty, and readiness to change. Such organizations tend to treat their employees well, and employees, in turn, treat the organization well. These organizations also tend to be more concerned about their employees than the low-performance organizations, and they tend to have employees who are able to find helpful, knowledgeable opinions among their coworkers. 3. Employees have the freedom to use their judgment: In high-performance organizations, employees have more freedom to use their own discretion than employees do in low-performance organizations. Employees in these organizations also have more liberty to change processes or procedures to improve outcomes. Their supervisors have the same type of freedom. All of these changes are made within a more cohesive group than in low-performance organizations. The feedback loops minimize disruption and reduce confusion. 4. Ethics: As noted before, high-performance organizations tend to have a stronger set of ethics-related values than the low-performance organizations.

The Context for High-Performance Organizations
Business leaders should keep in mind that, despite the fact that high-performance companies tend to share many characteristics, there are many different strategic approaches to the marketplace. This was supported by the results of the AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007, which asked respondents to indicate what market strategies they were pursuing. (The question used a modified Treacy and Wiersema [1995] model.) Specifically, the questions identified four major market strategies: (1) competing on low price, (2) competing by offering a set of products and/or services, (3) competing by branding, and (4) competing by offering unique solutions. In essence, the research team asked respondents what their companies’ value propositions were. The data indicate that many companies pursue multiple value propositions. The research team’s conclusion from this finding is that companies in today’s highly competitive, globalized markets need to be prepared to pursue multiple strategies as they adjust to different markets. Nonetheless, the survey does suggest that some HOW DID RESPONDING COMPANIES value propositions are more likely than others to lead to APPROACH THEIR high performance. Although it’s true that some of the VALUE PROPOSITIONS?* • Distinctive branded products or services— world’s most successful companies compete by offering 84% low-priced products and services, this survey indicates that • Products or services that are customized offering “distinctive branded products and services” and for specific customers—79% “products and services that are customized for specific • Lower-price products or services with customers” was more strongly associated with good mardesirable extra features—31% ket performance. It’s possible that, in a highly competi• Lowest-price products and services—20% tive global marketplace, maintaining a position as a low*Percentages derived from percentage of companies cost provider is increasingly difficult to achieve while noting somewhat, strongly or very strongly agree. Multiple responses were accepted. maintaining the kind of margins associated with high performance. The value proposition that shows the

25

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

largest gap between higher and lower performers was “distinctive branded products or services” (see Appendix, Table 13).

Summary of Results
As this section of the report has shown, there is no single secret to high performance. Rather, successful organizations are dynamic systems with interdependent parts. However, as the AMA/Institute for Corporate Productivity team reviewed and digested the results of the AMA/HRI High-Performance Organizations Survey 2007, we developed a short list of characteristics of high-performance organizations: 1. They “walk the talk,” behaving consistently throughout the organization. 2. They understand their customers to a very high degree, knowing what customers need and focusing on meeting those needs. 3. They manage locally and yet share information; they develop and support great supervisors and provide access to as much information as employees can use. 4. They create an environment of focus and teamwork; they do this by designing procedures and processes to pull everyone together and by clearly measuring outcomes. 5. They treat employees well so that employees will treat the organization well; they clarify values and expectations and they behave with the highest ethical standards. Organizations that share these characteristics are not guaranteed to be high performers, but they stand a considerably better chance of performing well than if they fail to adopt these traits.

26

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

High Performance in the Year 2017
In this section, we describe a fictional corporation that we’ve called the High-Performance Organization Company, or HIPOC. We do this in order to illustrate what we believe will be the future characteristics of high-performance organizations.

27

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

This interview is set in the year 2017 and incorporates ideas from the AMA/Institute for Corporate Productivity team as well as from the High-Performance Organization Survey 2007. Of course, we can’t be sure what future state-of-the-art execution programs will look like, so these are only educated guesses about what approaches will work best in 10 years. Moreover, circumstances vary by company and industry, so not every feature of the organization’s program will be applicable in every company. Nonetheless, these kinds of exercises can help managers look beyond the daily operational details of managing their organizations. The AMA/Institute for Corporate Productivity research team encourages managers to engage in various strategic planning methods—such as scenario planning—to help them gain a better understanding of how their organizational performance programs could or should evolve.

Interview with Sara Ohmet, CEO of HIPOC
Proactive, Analytical, and Values-Driven Reporter: We are speaking with Sara Ohmet, Chief Executive Officer at HIPOC. Sara, HIPOC has gone through an unusually long period in which it has outperformed the overall marketplace and direct competitors in its industry. Everyone would like to know what your secret is, especially considering all the changes that have occurred in the marketplace over the last decade. Ohmet: I’d say we haven’t succeeded despite all those changes but because we’ve successfully adapted to those changes. Reporter: How so? Ohmet: We’ve long emphasized looking outside the corporation. Too often, organizations become inward-looking, but part of our culture is to focus a good deal of our attention on external customers, markets, and competitors. This means we aren’t surprised too often. We also stay abreast of the many other external factors that influence organizational performance. Reporter: Can you give us an example? Ohmet: The talent in today’s labor force is a good example. Some of our businesses require very specific skill sets, so we’ve become highly adept at determining where we can locate such talent externally. We’ve developed strong professional networks that we manage and track via information systems. We even collect data from universities and other educational institutions from all over the world to try to gauge where the top talent is located. In a growing number of cases, we contract with specialists we meet through Web-based and virtual-world-based communities. We’ve found that the virtual world spaces make it especially easy to do this. In some cases, we’ve been contracting multiperson avatars, in which several consultants share an online body so that they can pool their expertise even while interacting with us as a single, super-knowledgeable entity. Reporter: I guess that adds a whole other meaning to “diverse workers.” Can you hire as well as contract with these super employees?

28

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Ohmet: Well, you’d actually be hiring an existing team of people, of course, which we’ve sometimes done in the past. In a lot of cases, we hire people who we’ve worked with as contractors. In fact, we encourage our up-and-coming talent to work outside HIPOC for a while to gain a truly different perspective. This helps us maintain that external focus. Reporter: What other ways does HIPOC focus outwardly? Ohmet: We understand that the world is a very innovative place and that much of what we’ll need in the future has not been invented inside HIPOC. Therefore, we have systems and processes to keep track of up-and-coming technologies. One of the quickest ways to lose your competitive advantage is to ignore technological advances. We have employees and networked systems dedicated to tracking new developments and working to see how we might harness those technical advances. But that doesn’t mean that we jump on every bandwagon. Too often, companies adapt a technology just because it seems fashionable. In addition to using our standard R&D processes and partnerships, we audition up-and-coming technologies through what we call “quick trials”—in which a team quickly tries to apply a new technology to specific problems we’re having. Reporter: Some of your businesses are highly regulated. How do you deal with that issue? Ohmet: Again, we try to stay proactive and aware of what’s coming down the pike. We’ve been known to lobby against proposed new laws that we consider onerous, but that’s unusual for us. We generally try to stay ahead of laws and regulations that we see as inevitable. For example, our manufacturing operations tend to be “greener” than the law actually requires, and we’re much more safety and health conscious than government regulations actually require. Reporter: Your company seems to place a lot of emphasis on the concept of health, doesn’t it? Ohmet: Yes, we’re not just concerned with individual health but with organizational health. Our executive team refers to what we call the “quadruple bottom line.” This is an extension of the triple bottom line concept, which looks at the financial, social and environmental bottom lines of organizations. The fourth bottom line, in our estimation, is how well we function as a system. That is, we rigorously measure how well our different organizational components align with and work with one another. We’ve even found a correlation between individual and organizational health. That is, the better run we are, the healthier our employees seem to be. We have systems in place that, in aggregate, try to measure the impact of organizational behavior on employees’ state of wellness. The underlying driver is based both on our organizational values and on research showing that productivity can be increased by boosting the wellness of employees. It’s the right thing to do from both an ethical and analytical viewpoint. Reporter: Measuring the impact of organizational behavior on individual wellbeing sounds very complex and possibly legally risky. For example, a person’s well-being is influenced by all kinds of factors, from genetics to upbringing to home life to individual

29

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

choices. Do you really want your organization to be held legally responsible for workers’ well-being? Ohmet: Those are good points. Ultimately, of course, we don’t claim to have perfect knowledge about people’s health or what’s influencing it. We’re looking more at aggregate data of the sort that can help us improve the well-being of organizational members. We are using the data to work on preventive health issues. So far, our legal counsel hasn’t seen much risk in this for us, especially because our policies in this area are so progressive when compared to what’s required by law. Reporter: So, it sounds as if your organization derives large performance dividends from being unusually analytical, proactive, alert to changes, and focused on the health of your workers as well as your organization as a whole. Ohmet: Those are definitely a part of the story.

Clear, Consistent, and Customer-Focused Reporter: So what are the primary drivers of performance, in your opinion? Ohmet: I’d say most of it comes down to what we call the internal three Cs: clarity, consistency, and customers. We have to be clear about what we’re trying to achieve and how, consistent in how we present those messages, and always focused on needs of customers. There’s nothing new in any of this. Rather, it’s the way that we achieve those goals that continues to evolve. Reporter: Okay, so how have your approaches to customers, for example, changed over the last 10 years? Ohmet: Customers themselves have changed. They expect more, have more information, and have more choices. They’re also a lot more demographically diverse than they used to be, thanks to globalization. All this changes the way we approach customers. We have to react faster to their needs than we used to, be flexible enough to accommodate their more varied needs, and be able to sell our products as socially and environmentally responsible. We involve customers more in the innovation process, allow them to customize more, and have a more integrated and a more responsive customer-service system. We also interact with them on very different terms than we used to. Technology mediates the customer relationship more than it used to but we still have to maintain a personal touch. It’s a difficult challenge and we’re always thinking about how to do it better. Reporter: And how about clarity? Ohmet: Clarity is about two things: Excellent strategy formulation and communication. Too often, managers think it’s all about communicating something clearly. But that’s only a part of it. If you have a murky, messy strategy, you’re never going to be able to make it clear, no matter how persistent you are. So our approach to clarity has evolved over the last 10 years because there are new ways of formulating strategies, new strategic approaches and new ways of communicating those strategies. Reporter: Can you give an example of what you mean? Ohmet: We are in businesses today that we weren’t even thinking about 10 years 30

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

ago. For example, we now make products for kids, largely because they became savvy users of a modified high-tech product that was once reserved for adults. Going after that market was a strategic decision that didn’t make much sense to some of our adult-oriented employees at first. Leadership had to be clear about what we were doing and why. And we had to be clear in our own minds about why this new direction made sense. Reporter: Well, it’s certainly paid off for you. How could employees fail to see the potential? Ohmet: That market was an unknown to them. We had to make sure people understood how the strategy fit in with our mission, philosophy, and way of working. So we communicated, clearly and often, in many different styles but always with a certain consistency. Reporter: So your customer base evolved but your philosophy stayed the same. Ohmet: Our philosophy actually assumes a great deal of flexibility toward products and customers. Today’s organizations have to reinvent themselves to be able to react to what customers specifically want rather than to what organizations want to push out to them. So, our philosophy has to be flexible even while it maintains a consistency.

Well Led and Resilient Reporter: As you’ve become more global and have moved into other businesses, how have you maintained your culture and values? Ohmet: I think there are two answers. First, we needed terrific leadership. Second, those leaders need to be very canny about processes and structure. Let’s start with how leadership has changed. Today’s leaders have got to be extremely network savvy compared to 10 or 20 years ago, and they have to be able to motivate a much different workforce. They also must have plenty of global experience. In our organization, many originally hail from nations outside the U.S. We even have anthropologists involved in our leadership programs to help us understand and adjust to cultural differences. We also have a very sophisticated global recruitment and management database. We work hard on managing all the different views that a multilingual and multicultural workforce generates. Our leaders must be excellent at managing conflict, at running the kinds of virtual meetings that surface good ideas and at gaining everyone’s buy-in. And they must know when an issue needs to be handled locally or when it needs to be coordinated on a regional or global basis. Moreover, these leaders have to be excellent at creating organizational processes and structures that are flexible but not chaotic, adaptive but not unstable. In recent years, many organizations have lost their core. They’re little more than names on a contract. They’re constantly hiring new leaders and entering entirely new businesses. They merge, acquire, partner and network with abandon. But they’re virtually never seen as great performers. HIPOC, on the other hand, is intent on maintaining certain communication

31

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

processes and organizational structures that give us stability and yet resiliency over time. Sometimes we joke that we’re like the proverbial yogi who can twist himself in all kind of different shapes and yet maintain a healthy backbone. We’re most flexible at the extremities, in the ways we interact with and serve our customers.

Involved with the Community Reporter: Some experts argue that the boundaries between companies and communities aren’t as separate as they once were, thanks to the success of the responsibility movement over the last decade. What’s HIPOC’s take on these blurring boundaries? Ohmet: Some of that is true for us as well. We link our internal three Cs—clarity, consistency, and customers—with what we call the external three Cs: coordination, collaboration, and community. We coordinate with the community representatives when developing certain business plans, such as those involving building, waste management, environmental restoration, energy sharing, and the like. We collaborate during the implementation of those plans and keep in mind that we are, in fact, part of the larger community. Of course, like many other corporations these days, we gauge ourselves by using a social responsibility index. Our scores clearly affect our stock price, and, therefore, we take it very seriously. We also have metrics that identify the quality of life in every location we are in. These metrics help us assess the health of the community via data on the state of the education system, crime rates, the quality of governmental services, poverty rates, and many other social issues. Our premise is that there’s a positive feedback loop between community health and our own corporate performance, and the data usually bears this out. This is why our plants and operations don’t move around as much as they used to. Rather than downsizing and then shipping operations overseas, we usually just expand into new regions. The temptation to move abroad for the sake of low-cost labor—which we’ve done before—isn’t as strong now that there’s more global equity in this area. High Tech and High Touch Reporter: I’ve heard you refer to HIPOC as a high-touch organization, which is odd considering you’re a leader in various high-tech areas. Ohmet: We know the limitations of high-tech. Don’t get me wrong. High-tech communication is terrific and sometimes nearly miraculous. We use it all: team-based surface computing, telepresence suites, holographic integration apps, massively multiplayer environments, and more. It’s all wonderfully useful for a global corporation like ours, yet it can still feel distant and cold sometimes. Ultimately we’re still people. We need some face-to-face interactions with colleagues, especially when developing new products or solving difficult problems. There’s just nothing like smart people together in the same room, batting around ideas, sharing passions, establishing friendships. So, we make sure that they have 32

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

plenty of opportunities to work together. We have lots of satellite offices, volunteer groups, brainstorming meetings, retreats, and the like. We also encourage people to work with and within their local communities. Small, personally connected groups can make a huge difference to improving neighborhoods. Technology goes a long way toward mediating connections, but there’s nothing like a neighborhood porch party for really getting to know folks. All these high-touch initiatives become part of the culture. We want HIPOC to be a great place and a safe place to work, both physically and emotionally. Our employees then share this reality with our customers and the larger community. Reporter: Do you apply the high-touch philosophy to customer relations? Ohmet: We can’t possibly meet all our customers on a personal basis, of course, but we do hold events where we meet with them personally. We could sell all of our products and even many of our services online, but we don’t limit ourselves to online selling. We rent space in various retailers and have our own stores in major metropolitan areas, all in the name of connecting with our customers better. We want to know what they’re thinking, how they’re using products, how strongly they feel about our products. And we want to share our own passion with them. Having a passion for the beauty and design of our products is important to us. Reporter: Are there any downsides to forging personal relationships with customers? Ohmet: Well, one might be that you raise expectations. Employees, as individuals, are not available 24/7, yet customers expect HIPOC to be available 24/7. So we’ve developed teaming relationships that connect the customer with a team of our employees. Reporter: But how does this make a customer feel a connection? Isn’t this just an organization providing service through multiple faces? Ohmet: Of course, we have information systems that tell us vast amounts about our customers. There’s nothing new about that in terms of being able to pull up data about buying habits, credit reports, previous purchases, and other things. But we’ve gone the extra mile by giving them opportunities to voluntarily tell us things about themselves, things that they don’t mind are in our computer systems: favorite colors, hobbies, sports teams, musical tastes, and so forth. This helps us understand them a bit as individuals even if we don’t know them personally. And employees are trained in how to use this information in a way that isn’t off-putting to customers. Most customers enjoy this process. The whole social networking phenomenon of 10 years ago has now grown into connective software, software that the customers themselves have helped write.

Transparent, Healthy, and Professionally Managed Reporter: Any danger that your organization is becoming a bit too touchy feely for today’s super competitive marketplace? Ohmet: That’s a mistake our competitors sometimes make, thinking that we aren’t as tough as nails when it comes down to the financial fundamentals. One thing we’re great at is sharing financial data with everyone in the company and giving every33

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

one a stake in our success via stock options, profit sharing, and so forth. Transparency is one of our highest values. We all know when our bottom line is starting to suffer, which makes course corrections a lot easier. We also rigorously analyze the work environment, looking at individual, team and business unit performance. And we have systems in place to make sure we’re listening to everyone’s ideas about how to improve the business. Reporter: Do you see everyone as a potential leader? Ohmet: That’s a tricky question. Everyone can show leadership behaviors at times, but we view management itself as a serious discipline and profession, as we do any other technical profession, such as engineering, toxicology, or chemistry. Our supervisors may have technical skills but they’re also management professionals and we treat them that way. They’re well trained and are expected to grow and to continuously improve. Not everyone can be or wants to be a manager. Reporter: You said you analyze team behavior as well. How does that work? Ohmet: We have developed internal taxonomies that identify healthy and unhealthy units, departments, and locations. We have linked the typologies to our performance outcome measures. Consequently, every supervisor, manager, and executive has a complete picture—a moving picture, if you will—of how healthy their area is and what can be done to improve it. These pictures are based on integrated metrics that enable us to drill up or down in the organization, looking at how the organization behaves and helping us identify interventions that will improve our performance. Reporter: How do you define healthy? Ohmet: In HIPOC, healthy means that employees feel safe physically and emotionally, meet and exceed performance targets and work collaboratively with internal and external customers. We also look at how strongly connected our employees are to HIPOC on a personal level, understanding that some people need more connection to their place of work than others. And health means maintaining ethical operations and living by our values. For example, with all the personal information we have on our employees, our customers and our partners, there’s the potential for misuse of information. Ethics is a must in this environment. I’d say our values and ethics have remained stable over the years even as our businesses have shifted, our technologies have become more powerful, we’ve moved into other regions and industries, and we’ve run into new ethical questions. It’s good to have a values bedrock on which you can make decisions. Some things shouldn’t change.

34

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Conclusion
This study shows that achieving high levels of organizational performance is a multidimensional process.

35

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

It’s important for a company’s values and philosophy to align with its strategies, which then must align with performance metrics and leadership approaches. Organizational alignment is important but so is excellent execution. Strategies, for example, must be well thought out, and the organization should strive to exceed customer expectations. The study also suggests that, over the next 10 years, these characteristics of high-performance organizations are likely to remain stable but the ways in which companies demonstrate those characteristics will evolve. For example, there will be changes in leadership competencies, talent-management programs, technology usage, customer service, performance metrics, and the like. Achieving and maintaining high performance will require companies to adapt to a changing marketplace and shifting social attitudes. Organizational leaders will also need to adapt to new theories and understandings of high performance, staying abreast of the research in the field. After all, today’s favored strategies and best practices can easily become tomorrow’s failures of imagination. Amid these changes in practices and marketplaces, there will companies that are especially outstanding in terms of their ability to perform at a high level for years at a time. These organizations will always be worth studying because they have much to teach us.

36

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Epilogue
This study shows that companies are high-performance organizations because of the effectiveness and efficiency of their leadership and management of operations. As you have read in this study, there are a number of factors that specifically influence corporate performance—talent management, globalization, authenticity, technology, and the like—and the importance of strategy, customer focus, processes, and values to corporate performance. It identifies specific actions you can implement to ensure your business will be a high-performance organization, pointing up the importance of a multidimensional approach. Alignment of values and mission and then alignment of these with performance metrics and leadership approach is critical to success as an organization. Each of these areas also has key practices that must be followed—from clear and well thought out strategies to an organizational culture that is externally focused on customers, markets, and competitors, to clarity about performance expectations. Thus our study should give you the start of a to-do list to examine your organization’s well being and start you on the way to building and sustaining a highgrowth company. We need only to look at companies that are complacent and therefore not performing to their potential to recognize how important it is to know what makes a high-performance organization. Only then can we begin the building process. AMA has made a commitment to continue to develop timely, relevant learning opportunities that will support your effort. We recognize that creating a highperformance organization in the twenty-first century will demand your organization unlearn and bury some old habits of the twentieth century. We can help you do this. Edward T. Reilly President and Chief Executive Officer American Management Association

37

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Appendix
About This Survey
Target Survey Population The target survey population of the AMA/Institute for Corporate Productivity HighPerformance Organization Survey consisted of the Institute for Corporate Productivity e-mail list of primarily high-level human resource professionals; AMA’s international e-mail list of supervisors, managers and executives across a wide range of functions; and HR.com’s list of members. In total, 1,369 usable surveys were submitted. Most organizations were either global (34%) or multinational (26%), while the rest were national. Survey Instrument In this survey, multiple questions used the well-accepted Likert-type scale, with a 1 rating generally designated as “very strongly disagree” and a 7 rating designated as “very strongly agree.” Market-performance questions used a 1-to-5 scale so the data would remain comparable with previous AMA/HRI surveys. There were 23 questions in all, 11 geared toward the demographics of respondents. Some questions had multiple parts. Procedure A link to an online survey was e-mailed to the target population by region during April and May 2007.

38

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Demographic Questions and Results
Table 1

In what function do you currently work? Finance General management HR Administrative Marketing Operations Research and development Sales Systems/IT Other
Table 2

6.27% 16.89 33.93 4.34 6.35 7.67 4.73 4.26 3.41 12.15

What is your current title? CEO/President/Chairman EVP/SVP Vice President Director Manager Supervisor Other 5.73% 2.79 7.13 23.55 34.70 3.64 22.46

Table 3

What is your level of responsibility? Corporate Division Region Plant Office 42.68% 19.05 13.32 6.27 18.68

39

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 4

What is your gender? Male Female 53.14% 46.86

Table 5

What is your age? 24 or younger 25-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-plus 1.63% 6.66 12.16 15.26 20.91 16.65 14.95 8.83 2.56 0.39

Table 6

What is the size of your organization’s entire workforce in the world? Under 100 employees 100-499 500-999 1,000-3,499 3,500-4,999 5,000-9,999 10,000 or more 17.58% 18.05 8.06 13.17 5.27 7.98 29.89

40

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 7

What is the total revenue (in USD) of your entire worldwide organization? Less than $50 million $50-$249 million $250-$499 million $500-$999 million $1 B to $2.99 B $3 B to $9.99 B Over $10 B 27.67% 13.95 8.45 7.91 11.40 11.94 18.68

Table 8

Please identify your organization by type of operation: Global (high level of global integration) Multinational (national/regional operations act independently) National (operations in one country only) 33.59% 26.22 40.19

41

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 9

In which overall region are you located? Canada U.S. Mexico United Kingdom France Germany Other Western Europe Eastern Europe Scandinavia China India Japan Korea Other Asia Central America South America Caribbean Africa Oceania Middle East 9.46% 14.69 4.53 6.36 4.83 5.13 5.92 4.90 3.32 5.13 4.22 4.17 2.79 5.02 3.06 4.51 2.10 3.54 2.40 3.92

42

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Performance Questions and Results
About These Categories
A variable labeled performance was created from the average of the four performance questions shown below. A tertiary split was then done on performance, creating high, middle, and low groups. The Higher Performers are the high group, and the Lower Performers are the low group. Data from these two groups were incorporated into many of the tables in this appendix. In addition, Pearson correlations were calculated between the variable performance and each of the individual practices. Relationships that are statistically significant at the .01 level (two-tailed) are noted and the rest are marked as not significant. A gap analysis was also done that compared the differences in responses between the Higher Performers and the Lower Performers. Positive values indicate that Higher Performers engage in a specific practice more so than Lower Performers. Negative values indicate the opposite. The greater the absolute value, the greater the differences between Higher and Lower Performers.

Table 10
On a scale from 1-5, how would you rate the following compared to the last five years?*

Responses Your revenue growth Your market share Your profitability Your customer satisfaction Overall market performance

Overall 3.81 3.66 3.68 3.69 3.71

High Performers 4.78 4.50 4.59 4.30 4.54

Low Performers 2.75 2.75 2.62 3.07 2.80

*Responses to these questions are based on a 5-point scale, with 1 = “at an all-time low level” and 5 = “at an all-time high level.”

43

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 11
How do the following performance indicators compare to the last five years?

Responses At an all-time low level Significantly worse About the same Significantly better At an all-time high level

Revenue Growth 2.00% 8.26 18.68 48.54 22.52

Market Share 1.17% 8.42 26.61 50.38 13.42

Profitability 1.83% 10.01 21.77 51.04 15.35

Customer Satisfaction 0.58% 5.01 30.05 53.26 11.10

Value Proposition Questions and Results
Table 12
How does your organization create its value proposition?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses Lowest prices Low prices with desirable features Distinctive branding Customization

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

21.45% 14.67 1.17 2.11

25.77% 22.80 2.23 3.37

16.35% 14.67 3.18 4.11

16.23% 17.27 9.87 11.58

10.10% 15.80 19.11 18.42

6.92% 11.29 41.72 34.32

3.18% 3.50 22.72 26.11

44

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 13
On a scale from 1-7, how strongly do you agree or disagree that your organization’s value proposition is created by offering the following?
Correlation Between Performance and Practice** Difference Between HP and LP Scores***

Responses Lowest price products or services Lower price products or services with desirable extra features Distinctive branded products or services Products or services that are customized for specific customers

All Respondents*

Higher Performers*

Lower Performers*

3.01

2.91

3.08

n.s.

-0.17

3.45 5.60

3.37 5.81

3.51 5.32

n.s. 0.16

-0.14 0.49

5.48

5.61

5.22

0.13

0.39

* Scores based on 7-point Likert Scale. ** Pearson correlations were calculated between the variable performance for all respondents and each of the individual practices. Relationships that are statistically significant at the .01 level (two-tailed) are noted and the rest are marked as not significant. *** Differences between Higher-Performer and Lower-Performer scores.

Product Questions and Results
Table 14
Which of your customers’ needs are your products designed to meet?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses Immediate needs Short-term needs Long-term needs Future needs

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

0.82% 1.03 0.62 0.83

1.53% 2.57 0.21 1.24

3.06% 3.80 2.77 4.97

7.65% 9.55 6.57 10.67

18.47% 23.51 14.99 18.65

39.39% 37.89 40.76 33.89

29.08% 21.66 34.09 29.74

45

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 15
On a scale from 1-7, how strongly do you agree or disagree that your organization’s products are designed to meet your customers’ following needs?
Correlation Between Performance and Practice Difference Between HP and LP Scores

Responses External customers’ immediate needs External customers’ short-term needs External customers’ long-term needs External customers’ future needs

All Respondents

Higher Performers

Lower Performers

5.76 5.52 5.94 5.66

5.92 5.58 6.14 5.93

5.52 5.40 5.68 5.36

0.13 n.s. 0.19 0.19

0.40 0.18 0.46 0.57

Management Questions and Results
Table 16
Does your organization’s management expect employees to be good at the following?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses Efficiency Quickly adapting to make different products or deliver different services Understanding how to make many different types of products or deliver many different types of services Using their skills, knowledge and experience to create unique solutions for customers

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

0.30% 0.51

0.71% 1.53

1.83% 2.86

4.97% 6.33

15.01% 18.28

45.03% 40.96

32.15% 29.52

0.93

2.37

6.09

12.18

22.19

34.37

21.88

0.92

1.94

3.17

6.13

13.60

36.40

37.83

46

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 17
On a scale from 1-7, how strongly do you agree or disagree that your organization’s management expects employees to be good at the following?
Correlation Between Performance and Practice Difference Between HP and LP Scores

Responses Efficiency Quickly adapting to make different products or deliver different services Understanding how to make many different types of products or deliver many different types of services Using their skills, knowledge and experience to create unique solutions for customers

All Respondents

Higher Performers

Lower Performers

5.97

6.19

5.75

0.17

0.44

5.81

6.02

5.56

0.17

0.46

5.43

5.60

5.12

0.15

0.48

5.90

6.27

5.47

0.27

0.80

Process Questions and Results
Table 18
Are your organization’s processes primarily designed to create the following?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses Efficiency Effectiveness Flexibility Uniqueness

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

0.92% 0.41 1.84 1.55

3.47% 1.63 3.57 4.44

5.30% 3.46 7.24 9.70

11.72% 9.05 16.53 16.41

24.57% 21.06 26.02 24.97

32.62% 38.35 27.55 25.28

21.41% 26.04 17.24 17.65

47

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 19
On a scale from 1-7, how strongly do you agree or disagree that your organization’s processes are primarily designed to create the following?
Correlation Between Performance and Practice Difference Between HP and LP Scores

Responses Efficiency Effectiveness Flexibility Uniqueness

All Respondents

Higher Performers

Lower Performers

5.39 5.68 5.13 5.05

5.73 5.99 5.56 5.38

4.92 5.24 4.61 4.68

0.26 0.27 0.28 0.20

0.81 0.75 0.96 0.71

Employee Questions and Results
Table 20
Which type of employees best fit your organization’s culture?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses Logical thinkers Intuitive thinkers Steady workers Rapid workers

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

0.41% 0.61 0.20 0.61

1.12% 2.13 2.03 1.94

3.86% 6.81 3.24 6.12

11.27% 14.84 10.23 17.14

24.47% 27.03 25.53 28.06

39.49% 30.39 40.73 31.63

19.39% 18.19 18.03 14.49

48

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 21
On a scale from 1-7, how strongly do you agree or disagree that the following types of employees fit your organization’s culture?
Correlation Between Performance and Practice Difference Between HP and LP Scores

Responses Logical thinkers Intuitive thinkers Steady workers Rapid workers

All Respondents

Higher Performers

Lower Performers

5.54 5.29 5.53 5.23

5.80 5.58 5.67 5.44

5.29 5.00 5.43 5.08

0.18 0.19 0.09 0.10

0.50 0.58 0.24 0.36

Strategy Questions and Results
Table 22
How strongly do you agree or disagree with the following statements regarding your organization’s strategy?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses My organization’s philosophy statement is consistent with its strategy. My organization’s strategic plan is clear and well thought out. My organization’s philosophy statement is frequently discussed.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.20%

2.61%

4.47%

9.91%

20.92%

39.11%

21.79%

1.95

3.79

6.93

12.13

25.79

34.02

15.38

2.74

8.87

13.03

15.88

26.94

22.56

9.97

49

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 22 (continued)
How strongly do you agree or disagree with the following statements regarding your organization’s strategy?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses The basic theme of my organization’s philosophy statement matches my personal philosophy. I know what I need to know about my organization’s strategy in order to do my job effectively. The behavior of my organization’s executive management team is consistent with the organization’s philosophy as I understand it. The behavior of my organization’s middle managers is consistent with the organization’s philosophy. The behavior of my organization’s executives is consistent with the behaviors needed to successfully execute the strategic plan. The behavior of my organization’s middle managers is consistent with the behaviors needed to successfully execute the strategic plan. My organization-wide performance measures match the organization’s strategy. The behavior of my organization’s employees is consistent with the organization’s philosophy. The behavior of my organization’s employees is consistent with the behaviors needed to successfully execute the strategic plan.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.41

2.50

4.23

13.36

23.13

37.02

18.35

1.30

2.27

5.83

7.99

21.81

36.93

23.87

2.49

4.44

6.18

15.06

21.78

34.67

15.38

1.63

2.51

7.95

18.30

33.33

28.87

7.41

2.28

4.34

5.86

15.94

23.43

36.01

12.15

1.31

3.38

7.30

19.06

35.29

27.02

6.64

1.96

3.04

7.17

16.63

26.74

34.78

9.67

0.87

3.69

6.62

20.93

34.16

26.36

7.38

1.19

3.79

6.60

21.00

34.52

26.19

6.71

50

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 23
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s strategy?

Responses My organization’s philosophy statement is consistent with its strategy. My organization’s strategic plan is clear and well thought out. My organization’s philosophy statement is frequently discussed. The basic theme of my organization’s philosophy statement matches my personal philosophy. I know what I need to know about my organization’s strategy in order to do my job effectively. The behavior of my organization’s executive management team is consistent with the organization’s philosophy as I understand it. The behavior of my organization’s middle managers is consistent with the organization’s philosophy.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

5.51

5.89

5.02

0.27

0.87

5.20

5.64

4.61

0.32

1.02

4.63

4.93

4.22

0.21

0.70

5.39

5.69

5.02

0.23

0.66

5.53

5.80

5.08

0.23

0.73

5.15

5.53

4.60

0.25

0.93

4.95

5.29

4.48

0.25

0.80

51

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 23 (continued)
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s strategy?

Responses The behavior of my organization’s executives is consistent with the behaviors needed to successfully execute the strategic plan. The behavior of my organization’s middle managers is consistent with the behaviors needed to successfully execute the strategic plan. My organization-wide performance measures match the organization’s strategy. The behavior of my organization’s employees is consistent with the organization’s philosophy. The behavior of my organization’s employees is consistent with the behaviors needed to successfully execute the strategic plan.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

5.11

5.50

4.61

0.25

0.89

4.91

5.29

4.43

0.26

0.86

5.06

5.50

4.47

0.29

1.04

4.92

5.28

4.43

0.27

0.85

4.89

5.31

4.37

0.29

0.94

52

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Customer Questions and Results
Table 24
What is your organization’s strategy regarding customers?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses We assess and determine our customers’ future needs. We believe that the business exists primarily to serve customers. We strive to be the best in the world in providing value for our best customers. We exceed our customers’ expectations. We have a process to assess and determine our customers’ future needs. We accurately target our customers’ long-term needs. We use highly developed customerlistening strategies to determine our customers’ expectations. We use customer research information to shape new products and services. We use customer information as the most important factor for developing new products and services. My organization develops special processes for our best customers. Our internal processes are designed to best meet the needs of the customer. My organization has flexible procedures and policies that act as guidelines in meeting customer needs.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

0.34%

1.68%

4.94%

10.33%

30.30%

37.37%

15.04%

0.00

0.34

3.02

6.49

14.65

39.37

36.13

0.23

1.92

3.16

6.09

16.91

38.22

33.48

0.67

2.02

4.59

18.03

33.15

29.79

11.76

1.14

3.99

8.31

15.72

29.04

29.61

12.19

1.13

3.72

6.99

15.90

35.74

26.83

9.70

2.18

6.66

11.60

20.32

25.60

23.19

10.45

2.31

4.75

9.26

15.63

26.85

29.28

11.92

1.62

2.66

6.94

16.44

28.59

30.90

12.85

1.40

3.15

8.17

13.54

29.17

29.05

15.52

1.23

3.59

8.42

20.54

28.40

27.61

10.21

2.03

4.52

8.47

19.66

29.72

24.86

10.73

53

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 25
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s strategy regarding customers?

Responses We assess and determine our customers’ future needs. We believe that the business exists primarily to serve customers. We strive to be the best in the world in providing value for our best customers. We exceed our customers’ expectations. We have a process to assess and determine our customers’ future needs. We accurately target our customers’ long-term needs. We use highly developed customerlistening strategies to determine our customers’ expectations. We use customer research information to shape new products and services. We use customer information as the most important factor for developing new products and services. My organization develops special processes for our best customers. Our internal processes are designed to best meet the needs of the customer. My organization has flexible procedures and policies that act as guidelines in meeting customer needs.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

5.41

5.73

5.02

0.26

0.71

5.98

6.22

5.66

0.22

0.56

5.86 5.17

6.20 5.59

5.47 4.71

0.28 0.33

0.74 0.88

5.05

5.43

4.60

0.25

0.84

5.01

5.38

4.48

0.30

0.90

4.72

5.12

4.24

0.26

0.88

4.95

5.28

4.49

0.24

0.79

5.12

5.53

4.58

0.30

0.95

5.15

5.48

4.88

0.17

0.60

4.95

5.33

4.51

0.28

0.82

4.88

5.24

4.52

0.22

0.72

54

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Leadership Questions and Results
Table 26
How strongly do you agree or disagree with the following statements regarding your organization’s leadership?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses My immediate supervisor understands the strengths I bring to my job. My immediate supervisor routinely helps me improve my performance. Employees in my organization feel comfortable disagreeing with anyone in the organization. Our HR function is continually creating innovative approaches to increase employee effectiveness. Our HR function is continually borrowing innovative approaches to increase employee effectiveness. In my organization, management promotes the person who has the best skills and knowledge to do the job. Management rewards employees who take risks to better serve customers. Employees are rewarded for meeting customer satisfaction goals. In my organization, everyone is clear about the organization’s performance expectations. Employees are empowered to use their own judgment to meet customer needs. Employees believe that their behavior affects the organization.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.29%

2.22%

5.37%

9.11%

20.44%

39.02%

22.55%

3.64

4.47

10.93

16.22

27.03

26.67

11.05

4.35

7.44

12.59

21.97

28.26

19.68

5.72

6.94

10.40

13.87

21.04

26.01

15.72

6.01

6.99

10.84

14.34

21.21

26.69

14.80

5.13

4.73

5.08

9.58

19.28

26.91

25.06

9.35

4.31

6.76

11.42

22.61

26.81

20.51

7.58

2.79

5.24

7.92

20.26

28.29

26.54

8.96

2.85

3.88

7.19

18.49

25.46

30.25

11.87

3.78

4.47

7.91

20.18

31.19

24.54

7.91

1.60

3.21

6.30

15.92

27.15

31.16

14.66

55

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 27
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s leadership?

Responses My immediate supervisor understands the strengths I bring to my job. My immediate supervisor routinely helps me improve my performance. Employees in my organization feel comfortable disagreeing with anyone in the organization. Our HR function is continually creating innovative approaches to increase employee effectiveness. Our HR function is continually borrowing innovative approaches to increase employee effectiveness. In my organization, management promotes the person who has the best skills and knowledge to do the job. Management rewards employees who take risks to better serve customers. Employees are rewarded for meeting customer satisfaction goals. In my organization, everyone is clear about the organization’s performance expectations. Employees are empowered to use their own judgment to meet customer needs. Employees believe that their behavior affects the organization.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

5.52

5.77

5.23

0.18

0.54

4.83

5.06

4.54

0.16

0.52

4.44

4.66

4.07

0.17

0.59

4.20

4.40

3.83

0.18

0.57

4.15

4.33

3.78

0.17

0.55

4.71

5.04

4.19

0.25

0.85

4.53

4.80

4.11

0.19

0.69

4.81

5.09

4.42

0.21

0.67

4.98

5.43

4.51

0.26

0.92

4.76

5.09

4.41

0.20

0.68

5.16

5.50

4.73

0.24

0.77

56

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Performance Questions and Results
Table 28
How strongly do you agree or disagree with the following statements regarding your organization’s performance?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses My organization’s performance measures are clearly defined. Employees receive the training and instruction necessary to do the job properly. My supervisor has the information and knowledge I need to do my job. I receive the information I need to do my job from my supervisor. I receive the information I need to do my job from my external customers. In my organization, employees have easy access to any information within the organization that they need to improve doing their job. When employees change jobs within the organization, they know what they must do to perform well in the new job. My peers and others within my organization have the information and knowledge I need to do my job. In my job, functional area, or team, we are always aware of how satisfied our internal customers are. In my organization, we are always aware of how satisfied our external customers are. My organization has a clearly defined and well-followed process to resolve disagreements.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.81%

3.37%

7.82%

14.56%

26.47%

32.37%

13.60%

2.16

4.57

6.97

17.67

28.73

31.49

8.41

2.73

4.34

5.83

15.38

25.31

34.12

12.28

3.47

4.70

9.03

18.44

26.36

27.97

10.02

3.36

3.49

7.88

20.54

30.62

27.00

7.11

2.17

4.95

8.20

21.71

27.99

25.69

9.29

2.11

5.09

7.69

22.46

32.75

23.33

6.58

2.32

3.54

6.47

22.59

32.23

27.23

5.62

0.99

4.21

7.67

23.76

30.07

25.25

8.04

1.00

3.36

7.72

22.29

28.64

27.77

9.22

3.90

7.56

15.73

23.54

24.63

19.63

5.00

57

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 28 (continued)
How strongly do you agree or disagree with the following statements regarding your organization’s performance?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses Our delivery schedules for products and services are based on customer needs. Our internal processes are designed to enable us to work together as well as possible. Our highest priorities are on meeting customers’ needs. We act as if customer service is only a required function rather than a critically important function. We use leading-edge information solution technology for customer relationship management. We seldom change our processes. We keep current with state-of-themarket technological advances. Our performance measures are internally focused. Our performance measures focus on customer retention. We use numerous direct measures for quality control of our products and services, such as cost of replacement, warranty or replacement service. We use numerous indirect measures for quality control of our products and services, such as lost business or internal rework. Salespeople and frontline employees have little access to competitor information. Employees from different internal functions make sales calls together.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.38

2.25

5.50

13.63

21.63

37.38

18.25

2.90

4.83

9.30

20.53

27.54

26.57

8.33

0.48

1.81

3.02

12.91

18.46

36.55

26.78

16.38

18.61

15.63

16.38

17.12

11.54

4.34

7.16 10.53

10.93 17.07

14.57 19.98

20.35 23.12

21.98 16.46

17.96 9.32

7.04 3.51

5.26

7.46

10.76

22.86

25.06

18.95

9.66

3.81

6.89

13.78

28.04

28.41

15.25

3.81

2.53

5.06

11.38

23.26

26.93

23.64

7.21

3.39

7.05

10.44

22.71

23.13

24.26

9.03

5.19

5.85

9.04

25.80

26.46

19.81

7.85

13.11

17.21

17.90

20.90

17.35

10.11

3.42

7.59

12.41

12.70

25.55

22.19

14.16

5.40

58

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 29
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s performance?

Responses My organization’s performance measures are clearly defined. Employees receive the training and instruction necessary to do the job properly. My supervisor has the information and knowledge I need to do my job. I receive the information I need to do my job from my supervisor. I receive the information I need to do my job from my external customers. In my organization, employees have easy access to any information within the organization that they need to improve doing their job. When employees change jobs within the organization, they know what they must do to perform well in the new job. My peers and others within my organization have the information and knowledge I need to do my job. In my job, functional area, or team, we are always aware of how satisfied our internal customers are. In my organization, we are always aware of how satisfied our external customers are. My organization has a clearly defined and well-followed process to resolve disagreements. Our delivery schedules for products and services are based on customer needs.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

5.12

5.53

4.70

0.25

0.83

4.94

5.27

4.50

0.24

0.77

5.08

5.37

4.76

0.19

0.61

4.84

5.01

4.56

0.16

0.45

4.81

4.99

4.59

0.14

0.41

4.83

5.09

4.52

0.18

0.56

4.75

5.00

4.44

0.20

0.56

4.83

5.05

4.59

0.17

0.46

4.86

5.05

4.59

0.15

0.46

4.94

5.23

4.68

0.18

0.55

4.36

4.48

4.12

0.12

0.35

5.37

5.60

5.11

0.16

0.49

59

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 29 (continued)
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s performance?

Responses Our internal processes are designed to enable us to work together as well as possible. Our highest priorities are on meeting customers’ needs. We act as if customer service is only a required function rather than a critically important function. We use leading-edge information solution technology for customer relationship management. We seldom change our processes. We keep current with state-of-the-market technological advances. Our performance measures are internally focused. Our performance measures focus on customer retention. We use numerous direct measures for quality control of our products and services, such as cost of replacement, warranty or replacement service. We use numerous indirect measures for quality control of our products and services, such as lost business or internal rework. Salespeople and frontline employees have little access to competitor information. Employees from different internal functions make sales calls together.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

4.78

5.11

4.37

0.24

0.74

5.64

5.89

5.32

0.20

0.57

3.51

3.25

3.68

n.s.

-0.43

4.21 3.60

4.55 3.47

3.84 3.86

0.17 n.s.

0.71 -0.38

4.50

4.85

4.08

0.18

0.77

4.31

4.26

4.30

n.s.

-0.04

4.67

4.94

4.38

0.19

0.56

4.64

4.82

4.29

0.14

0.53

4.53

4.71

4.27

0.13

0.43

3.56

3.54

3.67

n.s.

-0.12

4.06

4.21

3.88

n.s.

0.34

60

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Culture Questions and Results
Table 30
How strongly do you agree or disagree with the following statements regarding your organization’s culture?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses A shared value that keeps my organization together is loyalty to the organization. A shared value that keeps my organization together is commitment to innovation. Our organizational culture is internally competitive. In my organization, everyone working together cohesively is the most important value. My organization emphasizes readiness to meet new challenges. My organization’s organizational culture is externally focused on our customers, markets, and competitors. The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by my supervisor. The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by me. If employees in my organization know they can improve work processes, they will make the changes.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.63%

2.89%

6.90%

14.68%

26.60%

34.63%

12.67%

3.02

5.42

10.96

20.40

28.46

24.18

7.56

2.65

6.05

14.25

20.81

30.01

20.93

5.30

3.37

5.37

12.23

20.10

24.59

26.97

7.37

1.13

2.88

6.75

17.25

26.88

34.88

10.25

1.51

2.52

6.17

14.74

27.71

34.38

12.97

6.92

12.44

13.72

24.36

23.72

14.74

4.10

5.31

7.59

10.37

23.14

26.42

20.61

6.57

1.88

2.38

9.77

22.56

31.70

25.56

6.14

61

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 30 (continued)
How strongly do you agree or disagree with the following statements regarding your organization’s culture?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses My organization’s grapevine is as accurate as, or more accurate than, most formal communications. My organization’s grapevine is always faster than my organization’s formal communications. During work breaks, employees most often talk about organization-related issues. Most employees can find knowledgeable, informed opinions from co-workers about issues affecting the organization. In my organization, employees need to bypass the formal organization to get things done. Most employees would say that my organization is very safety-conscious. Most employees would say that my organization is very concerned about employees. In my organization, most employees participate in or show interest in the organization-sponsored social events. Most employees think this is a good place to work.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

3.75

6.86

12.55

28.72

27.04

16.30

4.79

1.80

4.77

8.12

25.26

31.31

19.97

8.76

3.53

7.32

12.68

30.85

27.58

14.12

3.92

1.02

2.68

6.50

27.01

36.43

21.78

4.59

9.39

17.77

21.83

24.75

16.12

7.49

2.66

0.80

3.05

5.31

17.37

26.79

29.71

16.98

2.90

3.78

6.43

17.28

25.98

31.90

11.73

2.46

3.75

7.50

20.57

30.01

27.30

8.41

2.01

1.88

2.76

13.17

28.73

36.14

15.31

62

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 31
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s culture?

Responses A shared value that keeps my organization together is loyalty to the organization. A shared value that keeps my organization together is commitment to innovation. Our organizational culture is internally competitive. In my organization, everyone working together cohesively is the most important value. My organization emphasizes readiness to meet new challenges. My organization’s organizational culture is externally focused on our customers, markets, and competitors. The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by my supervisor. The information and knowledge I need to do my job is spelled out in well-established procedures, practices, and instructions that are changed as necessary by me. If employees in my organization know they can improve work processes, they will make the changes.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

5.16

5.50

4.85

0.21

0.65

4.69

5.04

4.18

0.28

0.86

4.53

4.68

4.43

n.s.

0.25

4.68

4.91

4.30

0.18

0.60

5.12

5.53

4.65

0.28

0.87

5.20

5.55

4.84

0.23

0.71

4.06

4.13

3.81

0.10

0.33

4.46

4.66

4.27

0.11

0.39

4.81

5.06

4.50

0.19

0.56

63

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Table 31 (continued)
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding your organization’s culture?

Responses My organization’s grapevine is as accurate as, or more accurate than, most formal communications. My organization’s grapevine is always faster than my organization’s formal communications. During work breaks, employees most often talk about organization-related issues. Most employees can find knowledgeable, informed opinions from co-workers about issues affecting the organization. In my organization, employees need to bypass the formal organization to get things done. Most employees would say that my organization is very safety-conscious. Most employees would say that my organization is very concerned about employees. In my organization, most employees participate in or show interest in the organization-sponsored social events. Most employees think this is a good place to work.

All Respondents

Higher Performers

Lower Performers

Correlation Between Performance and Practice

Difference Between HP and LP Scores

4.36

4.43

4.28

n.s.

0.15

4.74

4.70

4.77

n.s.

-0.07

4.30

4.34

4.23

n.s.

0.10

4.79

4.94

4.61

0.12

0.33

3.54

3.39

3.81

-0.12

-0.42

5.23

5.29

5.02

n.s.

0.27

5.02

5.26

4.57

0.24

0.69

4.87

5.12

4.57

0.18

0.55

5.34

5.65

4.87

0.28

0.78

64

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Ethics Questions and Results
Table 32
How strongly do you agree or disagree with the following statements regarding ethics within your organization?
Sometimes Agree and Somewhat Sometimes Disagree Disagree

Responses We adhere to the highest standard of ethical behavior throughout the organization. In my organization, no one would consider misrepresenting a situation for personal gain.

Very Strongly Disagree

Strongly Disagree

Somewhat Agree

Strongly Agree

Very Strongly Agree

1.00%

1.25%

3.13%

9.02%

16.17%

37.84%

31.58%

2.03

2.28

7.72

14.81

20.63

31.77

20.76

Table 33
On a scale from 1-7, how strongly do you agree or disagree with the following statements regarding ethics within your organization?
Correlation Between Performance and Practice Difference Between HP and LP Scores

Responses We adhere to the highest standard of ethical behavior throughout the organization. In my organization, no one would consider misrepresenting a situation for personal gain.

All Respondents

Higher Performers

Lower Performers

5.78

5.99

5.45

0.23

0.55

5.28

5.39

4.98

0.16

0.42

65

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Bibliography
“4 Out of 5 Contact Center Pros Report That Technology Problems Regularly Impact Productivity.“ (2005, October 25). CRMToday [www.crm2day.com/news]. Accenture. (2006). The High-Performance Workforce Study. American Management Association. “Our History.“ Retrieved from http://www.amanet.org/aboutama/history.htm, June 29, 2007. American Management Association and Human Resource Institute. Agility and Resilience in the Face of Continuous Change. New York: AMA, 2006. Aon Corporation. (2006, January 10). “Political Interference Is Greatest Threat to Global Trading in 2006.“ Press release [www.aon.com]. Appel, A. (2007, April–May). “Filling the Talent Gap.“ Chief Executive. ProQuest, p. 22. Babbage, C. (1833). On the Economy of Machinery and Manufactures, 3rd ed. London: Charles Knight. Bansal, P. (2005, November–December). “Building Sustainable Value Through Fiscal and Social Responsibility.“ Ivey Business Journal Online. ProQuest. Bass, B.M., & Riggio, R.E. (2006). Transformational Leadership, 2nd ed. Mahwah, NJ: Lawrence Erlbaum Associates, Inc. Bonini, S., Mendonca, L., & Oppenheim, J. (2006). “When Social Issues Become Strategic.“ The McKinsey Quarterly [www.mckinseyquarterly.com]. No. 2. Butt, J., ed. (1971). “Robert Owen as a Businessman,“ in Robert Owen, Prince of Cotton Spinners. Bristol, UK: David & Charles. Byrne, G., Lubowe, D., & Blitz, A. (2007). “Using a Lean Six Sigma Approach to Drive Innovation.“ Strategy & Leadership, 35(2), 5-10. Cascio, W.F., & Wynn, P. (2004). “Managing a Downsizing Process.“ Human Resource Management Journal, 43(4), 425-436. Coffman, C., & Gonzalez-Molina, G. (2002). Follow This Path. New York: Warner Books, Inc. Collins, J.C., & Porras, J.I. (1994). Built to Last. Harper Collins Publishers, Inc. “Creating Leaders.“ (2003, October 25). The Economist [Supplement: “A Survey of Corporate Leadership“], 7-11. Davenport, T.H., & Harris, J.G. (2007). Competing on Analytics: The New Science of Winning. Boston, MA: Harvard Business School Press. Deming, W.E. (1986). Out of the Crisis. Cambridge, MA: Massachusetts Institute of Technology, Center for Advanced Engineering Study, p. 6. Denison Consulting. (2007, January 25). “Latest Study from Denison Consulting Determines That Companies with High-Performance Cultures Deliver Better Business Results.“ Press release [www.denisonculture.com]. Dupin, C. (1831). Discourse on the Condition of the Workers. Paris: Bachelier Library. Fayol, J.H. (1949). General and Industrial Management, trans. Constance Storrs. London: Sir Isaac Pitman and Sons. Foster, R., & Kaplan, S. (2001). Creative Destruction: Why Companies That Are Built to Last Underperform the Market—and How to Successfully Transform Them. New York: Currency/Doubleday. Gilbreth, Jr., F.B., & Carey, E.G. (1948). Cheaper by the Dozen. New York: Thomas Y. Crowell. Gilbreth, L. (1914). The Psychology of Management: The Function of the Mind in Determining, Teaching and Installing Methods of Least Waste. New York: Sturgis and Walton. Harford, T. (2007, June 2). “Shock of the New.“ Financial Times, p. 13. Human Resource Institute. (2006). Agility and Resiliency Survey Results. St. Petersburg, FL.

66

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Institute for Corporate Productivity. “The Sustainable Enterprise: Forging a Path to a Better Future“ [www.i4cp.com]. Obtained June 21, 2007. Institute for Corporate Productivity. “Talent Management Survey 2007: Preliminary Findings“ [www.i4cp.com]. Obtained June 5, 2007. International Labour Organization. (2006, September 15). “New Technologies Will Boost Productivity, but Also Impact Employment in Retail, Says ILO Report.“ Press release [www.ilo.org]. “It’s Not Easy Being Green.“ (2007, February). International Financial Law Review. ProQuest. Kanigel, R. (1997). The One Best Way: Frederick Winslow Taylor and the Enigma of Efficiency. New York: Viking. Kaplan, R.S., & D.P. Norton. (1992, January–February). “The Balanced Scorecard—Measures That Drive Performance.“ Harvard Business Review, 71-79. Kaplan, R.S., & Norton, D.P. (2005, July–August). “The Balanced Scorecard.“ Harvard Business Review. Kaplan, R.S., & Norton, D.P. (2006, March). “How to Implement a New Strategy Without Disrupting Your Organization.“ Harvard Business Review, pp. 100-109. Kirby, Julia. (2005, July–August). “Toward a Theory of High Performance.“ Harvard Business Review, 30-39. Lawler, E.E., & Worley, C.G. (2006). Built to Change. San Francisco: John Wiley & Sons, Inc. Lawrence, P.R., & Lorsch, J.W. (1969). Organization and Environment. Homewood, IL: Richard D. Irwin. Link, S., & Naveh, E. (2006, November). “Standardization and Discretion: Does the Environmental Standard ISO 14001 Lead to Performance Benefits?“ IEEE Transactions on Engineering Management. ProQuest. Lohr, S. (2007, March 13). “Study Says Computers Give Big Boosts to Productivity.“ nytimes.com [www.nytimes.com]. “Making a Financial Case for Ethical Conduct.“ (2006, April 15). Best Practices in HR, pp. 1-2. Manpower, Inc. (2006, October). Talent Shortage and Wage Inflation Survey. Marcus, A. (2006, Winter). “Persistent Winning and Losing.“ MWorld, pp. 36-39. Mayo, A. (2007, January–February). “What Are the Characteristics of a True Learning Organization?“ Strategic HR Review, p. 4. Mayo, E. (1933). The Human Problems of an Industrial Civilization. New York: Macmillan. Michel, L. (2007). “Understanding Decision Making in Organizations to Focus Its Practices Where It Matters.“ Measuring Business Excellence, 11(1), 33-45. Montgomery, J. (1840). The Cotton Manufacture of the United States of America Contrasted and Compared with That of Great Britain. London: John N. Van. Navarro, C., & Bass, C. (2007, February). “The Case for Automating Absence Management.“ Workspan, pp. 58-61. Neelankavil, J.P., & Comer, D.R. (2007). “The Best of the Best: Lessons from the Top Performing American Corporations, 1954–2005.“ Journal of Management Development, 26 (5). O’Toole, J., & Lawler, E.E. (2006). America at Work. New York: Palgrave Macmillan. O’Toole, J., & Lawler, E.E. (2006). The New American Workplace. New York: Palgrave Macmillan. Overholt, M.H. (1996). Building Flexible Organizations. Dubuque, IA: Kendall/Hunt Publishing Company. Owen, R. (1821). Report to the County of Lanark of a Plan for Relieving Public Distress. Glasgow: Wardlaw and Cunninghame. Parsons, T., ed. (1947). Max Weber, The Theory of Social and Economic Organizations. New York: Free Press. Pearce, J. (2003). “President’s Message: A Bifurcated Academy?“ The Academy of Management News, 34, pp. 1-2. Perry, G.R. (1953). Principles of Management. Homewood, IL: Richard D. Irwin. Peters, T.J., & Waterman, R.H., Jr. (1982). In Search of Excellence. New York: Harper and Row. Powell, J. (1772). “A View of Real Grievances,“ quoted in Asa Briggs, ed., How They Lived. Vol. 3. Oxford: Basil Blackwell, 1969. Scalfane, S. (2006, March 27). “What Keeps Insurer CEOs Up at Night?“ National Underwriter, pp. 28-29. Shaw, H. (2006, March 31). “Attitude Adjustment.“ CFO Magazine [www.cfo.com]. Sirota Survey Intelligence. “Companies Least Prepared for Keeping Employees Engaged in Their Jobs & Baby Boomer Retirements, Says Survey.“ Press release [www.sirota.com]. September 27, 2006. Smith, J.J. (2007, March 22). “Technology, New Economic Players Push Globalization.“ HR News [www.shrm.org]. “The Stat: 50% of HR Directors Say that 70% of Their Time Is Taken Up with Process Driven Activities.“ (2005, January–February). Strategic HR Review, p. 15.

67

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Stogdill, R.M. (1974). Handbook of Leadership: A Survey of Theory and Research. New York: Free Press. Synovate. (2006, July 28). “Staying Wired on Vacation; Travelers’ Use of Technology on the Road.“ Press release [www.synovate.com]. Taylor, F.W. (1903). Shop Management. New York: Harper and Row. Treacy, M., & Wiersema, R. (1995). The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market. New York: Addison Wesley The Ken Blanchard Companies. 2006 Corporate Issues Survey, 2006. Ure, A. (1835). The Philosophy of Manufactures: Or an Exposition of the Scientific, Moral and Commercial Economy of the Factory System of Great Britain. London: Charles Knight. Van de Ven, A. (1999). “The Buzzing, Blooming, Confusing World of Organization and Management Theory: A View from Lake Wobegon University.“ Journal of Management Inquiry, 8, p. 119. Vashistha, A. & Kublanov, E. (2006, September). “Seven Secrets of Successful Globalizers.“ Offshore Insights [www.neoIT.com], pp. 1-10. Watson Wyatt. (2006, November 15). “Disconnect Between Employers, Employees Threatens Loss of Key Workers, Watson Wyatt Finds.“ Press release [www.benefitslink.com]. Weber, G. (2005, January). “The Recruiting Payoff of Social Responsibility.“ Workforce Management [www.workforce.com]. Williams, D. (2007, February–March). “How to Find—and Keep—Skilled Workers.“ Area Development Site and Facility Planning. ProQuest, pp. 22+. Wren, C. (2005). The History of Management Thought, Fifth Edition. Hoboken, NJ: John Wiley and Sons, Inc. Wulfhorst, E. (2006, February 23). “Americans Work More, Seem to Accomplish Less.“ Reuters [http://today.reuters.com]. Zielinski, D. (2006, January). “Best and Brightest.“ Training, pp. 11-16.

68

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Authors and Contributors
PROJECT LEADER
Jay J. Jamrog is the senior vice president of research at the Institute for Corporate Productivity, formerly the Human Resource Institute (HRI). As a futurist, he has devoted the past 20 years to identifying and analyzing the major issues and trends affecting the management of people in organizations. Jamrog is the associate articles editor for the “building a strategic HR function” key knowledge area of Human Resource Planning, has had articles published in major business magazines, and is frequently quoted in business publications and newspapers. He often collaborates with, and speaks before, other organizations and associations on major research topics related to the future of people management. Prior to joining HRI in 1982, he held numerous management positions, including vice president of purchasing for a large import/export wholesaler. Contact information: (727) 345-2226 or jamrog@i4cp.com.

AUTHORS
Dr. Miles H. Overholt, Ph.D., is the director of systems measurement for the Institute for Corporate Productivity. Overholt leads an international team in developing new organizational assessment tools to measure the linkage among strategy, behavior, personality type, and individual competencies. As the team leader, he helped create the Organizational Capabilities Index (MAP—Measuring the Alignment of People— in Europe), the comparative organization tool that underlies the Institute for Corporate Productivity’s study of strategic alignment employee behavior and organizational performance. He has over 25 years of consulting and research expertise in organizational design, change, and behavior. He is the author of Building Flexible Organizations: A People-Centered Approach and has written numerous articles on organizational performance, change processes, systems thinking, and systems metrics. His undergraduate degree is from Lafayette College, and he earned his doctorate at the University of Pennsylvania. Contact information: (856) 786-9355 or RMCGMHO@aol.com.

69

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

Donna J. Dennis, Ph.D., is a leadership development professional with over 30 years of experience, helping leaders and teams increase leadership and team effectiveness through coaching, strategic planning, and team-building. She is known for innovative, business-focused solutions to organization and leadership issues. She holds a master’s degree in education, a Ph.D. in human development, and certification in personality assessment and executive coaching. Contact information: (609) 497-1997 or donna@leadership-solutions.info. James M. Lee, Ph.D., is an assistant professor of marketing at the University of Tampa. His research focus is in consumer psychology with an emphasis on personality influences on decision making. Recent research publications include the use of personality in personnel decisions and impact on employee burnout. Most recently he headed the marketing and IT departments of a multinational retailer, and he was president of the wholly owned e-commerce subsidiary. Contact information: (813) 253-6221 or jlee@ut.edu. Carol L. Morrison is the Productivity and Corporate Performance Knowledge Center manager for the the Institute for Corporate Productivity. She has a BS degree in sociology/social work and a BS degree in business administration/marketing. Her career experience spans public, private, and nonprofit sectors. She has established and directed a municipal government information department and headed employee communications for national and multinational corporations. A senior research analyst, she is the author of research reports on subjects ranging from change management to employee engagement. Contact information: (727) 345-2226 or writerclm@tampabay.rr.com. Mark Vickers is the vice president of research at the Institute for Corporate Productivity, formerly HRI. He has authored many reports and white papers for the institute, is the institute’s former managing editor, and is currently the editor of TrendWatcher and The Fortnight Report. He has authored and coauthored various periodical articles and has served as an editor and project manager for a number of AMA/HRI research projects. Contact information: (727) 345-2226 or vickers@i4cp.com.

OTHER CONTRIBUTORS
Various staff members of the Institute for Corporate Productivity provided background research, writing, and other support for this report. Special thanks to David Wentworth, who worked on the table data, and to Susan Fernandez, who proofed the report.

70

HOW TO BUILD A HIGH-PERFORMANCE ORGANIZATION >>

About American Management Association
American Management Association (AMA) is a world leader in professional development and performance-based learning solutions. AMA provides individuals and organizations worldwide with the knowledge, skills and tools to achieve performance excellence, adapt to changing realities and prosper in a complex and competitive world. Each year thousands of customers learn new skills and behaviors, gain more confidence, advance their careers and contribute to the success of their organizations. AMA offers a range of unique seminars, workshops, conferences, customized corporate programs, online learning, newsletters, journals and AMA books. AMA has earned the reputation as a trusted partner in worldwide professional development and management education that improves the immediate performance and long-term results for individuals and organizations. For more information on how you and your organization can gain a competitive advantage, visit www.amanet.org

Institute for Corporate Productivity
(Formerly known as the Human Resource Institute) The Institute for Corporate Productivity improves corporate productivity through a combination of research, community, tools, and technology focused on the management of human capital. With more than 100 leading organizations as members, including many of the best-known companies in the world, the Institute for Corporate Productivity draws upon one of the industry’s largest and most-experienced research teams and Executives-in-Residence to produce more than 10,000 pages annually of rapid, reliable and respected research and analysis surrounding all facets of the management of people in organizations. Additionally, the Institute for Corporate Productivity identifies and analyzes the upcoming major issues and future trends that are expected to influence workforce productivity and provides member clients with tools and technology to execute leading-edge strategies and “next” practices on these issues and trends.

71

About This Report
This report is based on a global survey that included 1,369 respondents, in-depth discussions among a team of researchers, and an extensive review of the business literature. Commissioned by American Management Association and conducted by the Institute for Corporate Productivity (formerly the Human Resource Institute), this report:

• Takes a historical look at the literature on high-performance • • • •
organizations Discusses the factors influencing organizational performance Describes the characteristics of high-performance organizations in the context of data from the global survey Describes what the best-in-class practices may look like in the year 2017 Provides a detailed look at the results from the AMA/Institute for Corporate Productivity High-Performance Organization Survey 2007

For more information about American Management Association
www.amanet.org • 1-800-262-9699

American Management Association • New York Management Centre Europe • Brussels Canadian Management Centre • Toronto American Management Association • Mexico City American Management Association Japan • Tokyo American Management Association China • Shanghai

Sign up to vote on this title
UsefulNot useful